CA INTERMEDIATE TL 3 Pt Te folitefa tds rae C a ee) fo}INDEX CaF Cg PEA U eel 1p Fag No. A) Companies Act, 2013 Preliminary 11to12 Incorporation of Company and Matters Incidental Thereto 2.110 2.8 Prospectus and Allotment of Securities 3.10 3.6 IShare Capital and Debentures 4.1 to 4.10 |Acceptance of Deposits by Companies 5.1t05.5 Registration of Charges 6.1 to 6.3 Management & Administration 7.110 7.9 Declaration and Payment of Dividend 8.1 to 8.2 |Accounts of Companies 9.1t09.5 lAudit and Auditors 10.1 to 10.5 B) Other Laws ol : [The Indian Contract Act, 1872 Ad to 14 IThe Negotiable Instruments Act, 1881 2.1 to 2.6 The General Clauses Act, 1897 3.1035 Interpretation of Statutes, Deeds and DocumentsIncorporated | Artifical Ee FEATURES OF A COMPANY (Chart 1.1) Separate Oe management Conte) Tec sucesion, Thus, death, insolvency ited ably, Company inte hares Limite o amount remaining unpaid on shares held by them 2. Company ited by Guarantee thou share capita Lined to amount guaranteed bythem. 3. Company ited by Guarantee having share capital | Umited to aerate of [amount remaning unpaid on shares & amount guaranteed by them 1. company with ulited iby + United. ie they have to konibtilente debt of Cis pac —————— ft. Acompany being een made optional jndercompeies Jamendment Act 2015] The ene capa of {the companys vided nto cena sped umber ofits of equal va and leachsuch unica are. [The concept of sare {pital enabes the investor topartcpate inthe ownership capital ofthe company. ahs share cpt eats te comany to mobi huge cpa outa om kts of vests, [ich would not beTYPES OF COMPANY (Chart 1.2) od eo fi tesoeton onion sstres |The aries mat conan a provson esting the fab otmembesto ase issharestely fp umiatin ot mentens + Aces mast cet provision whereby hc fis th umber ofits members to 200. inthis one member ony + Pnorsn employment are exided J+ employes reece / Ptbiton on mating inant pub |The aries mst rohit company rom [naling any nition tothe publi subscribe or lofts shares or debentures [rears acanpany whi |a)isnotaprvate company & [s hasamininun pip she [apt asmayte pect Provided hat aco whichisa fata of2en, oteiga priate ko, salle deamedtote publ kompun forte puro chs At ees where such ssid company cote tobe arate company in es aes; OPC means a company wich has ny onepesan Jszmenter When be mere Namine of 2 OF + ona natural person whois an ancien & fesidet inn, tal be geo incorporate fretian aon person company, tll be nines forse member of FC b. Miceeusprorsons J+ No personstlbe ge tlncereate more phan aon person company or become nine fre than onesuch company | Rominrstalbecme mente ornonine othe lore | uch. amet bencprated or comenedino company ander ston ote At + or camet cay ot NRC aces +0 camtinestn secures! dy corporte [tmeansa company, ter tana ub company i ap sare captal et which dos rt exceed fit iahrupesor such ier amour a ay be prescribed hich tal tbe mre than 100 li rove of wichasperP ALA fo inet preceding des lroteeee2croruchhiher lmourt as maybe prescbed wich ia ot be moe than 00 Provided hat ctr inthis case ial ply to— a ng coo subsidiary co; crepe nde se aco. orbody corporate pvr bv any seca Tole [Sdn [Aso company Conpny || coneamy||__e2 cree || ocx faretont fem nrtene an |onaberemgny, empayo tere ess cmos err fyi | i tt cen lemones orp meas {has seni ee locas tec win sry tint gs satiny eons |empany— —|entteca.naing epaatn fice fhe etn mpetn st oat Fenesn aon or | esmeconan later fie opr, ontcsy liom re |e ere. |v costaot | nto mess bretatiotng oss fats poner ae wet rg oumersgeter ome roto Wthereornre craiptin lesb [sins seers lamp: eter sn arene es ts ft ene essercsea ers ie hate camgane arenes lame | very pater retest freee lthaetara fancttte lettres |orangentnne oresth —friohstoshenet bese may_ fist te bepscibed, |fanenen Shares ee freee were iy ot lesmenber [seta by Ion oan |neiden aes iio nents tal ae when ai) latismade by congay lings lteter inevertot ining op 7 cpa || sae _| cs ‘(Section 8) | Section 406) Ps cians aor ae | Sa eal Retonveyoen fue (fom (reece (nou fara [wesw |Promnet |mmpsas |n 8 nen ra gg |= fetowere |oecct |isrecsce, alanis | ep sre | vg ————dl rm Vee fesae (sacs, |Cere aums Poo sereqteeewta (eeeeay |e (a emetic ferey [ores oom | cs eked frases hee an rates | haus line | a nts rosin em ae Fre [mom nai Pte tte emt ote. ec amma Bee || less eee eer eee fram | |ftoccoea |seemmemmone eens terete. fesicers Pes mes aor | eee as ce faders tlre fs ierINCORPORATION OF COMPANY AND MATTERS INCIDENTAL THERETO (Chart 2.1) Formation of company err One person company (OPC) fa) Co's so formed could be with limited liability (by shares or euarantee) or with unlimited ibility Ja) Memorandum of OPC shall indicate name of other person, who shall in event of subscriber's death or his incapacity to contract, become member of co. fe) natural person shall not be a member of more than a OPC at any point of time & said person shall nt be a Jnominee of more than a OPC lb) Other person whose name is given in memorandum shal give his prior written consent lh) No minor shall become member or nominee of OPC| [b) In case of a public company with/ |without limited liability any 7 or |more persons can form aco, c) other person may be given right to withdraw his consent i) Such Co. cannot be incorporated or converted into a| Jeo. under sec 8 of the Act. Jc) 2 or more persons can form a 1d) member of OPC may at any time change name of such |}j) cannot carry out Non-Banking Financial Investment private company other person by givin notice to co. &co. shall intimate _||activities including investment in securities of One aerson ue cana Re same to Registrar lanybody corporate. formed is one person company. fe) Any such change in name of person shall not be k} cannot convert voluntarily into any kindof co. Je) Persons who form co. are known ldeemed to be an alteration of memorandum as promoters. tis they who conceive| idea of forming co. They take all necessary steps for its registration. unless 2 yrs have expired from date of incorporation except where paid up share capita is increased beyond 8 50L or its avg, annual turnover during relevant period exceeds 2c. f) Only a natural person who is an Indian citizen & resident in india - shall be eligible to incorporate a OPC - shall be a nominee for sole member of a OPC. Explaination |- “resident in India” means a person who has stayed in India for a period of not less than 182 days [during immediately preceding FY. Explanation I while counting the number of days of stay ofa director in India for the FY 2018- 2019, any period of stay between 01.01.2018 till the date of notification ofthis rule shall also be countedformation of companies which are formed] lo charitable objects of commerce, lar, scence, sports, education, research, social welfare, religion, charity, protection lo environment ete. lip intends to: dividend to its members |b) Power of C6 to issue license C6 toregister such person or association ot persons as aco. with Vy hi vested in it under the sec 8 (1), C6 may also revoke such delegation of powers Jor may itself exercise powers & functions lunder said sections, itn its opinion, such |course of action is necessary in public interest [On registration co. shal y a e) Alteration of Memorandum & Articles co. registered under this sec shall not alter provisions of ts memorandum or articles co. regstered under sec 8 which intends to convert itsetinto a co. of any other kind shal cece ate & on revocation Registrar shal put [Limited or ‘Private Limited” against co's name in resister i) CG must give ita tobe heard in Imatter i) co. registered under this se: ate = Formation of companies with charitable objects, etc. (Section 8) Protons Caner er Jo. makes any default in Jcomplying with any of Jrequirements laid down in this sec, co. shal, be punishable with 0 & lirectors& every officer of Jcompany whois in default shall, be punishable with or with INCORPORATION OF COMPANY AND MATTERS INCIDENTAL THERETO (Chart 2.2) | Jcomoany law or ofthis Act regarded as Constitution of Co. “y ) Sec 2(56) - memorandum means MOA of aco. s originally framed Jor as altered from time to time in pursuance of any previous i) tis base document for formation of co. & alongwith AOA is li Requirement of independent directors ete ‘Can call its GM by giving | I) 1t contains abject for which co. is formed & therefore identifies possible scope ofits operations beyond which ts actions cannot go Shareholders, creditors lll those who deal with co i) memorandum is a public document lunder Sec 399 ofthe Companies Act, loos be identical with or resemble too nearly to name of an existing co. or + be such that its use by co. will constitute an offence under any law or is undesirable in opinion of CG i) Undesirable Names co. shall nat be registered with a name which contains J+ any word or expression whichis likely to give impression that co. is in Jany way connected with, or having patronage of, CG, any SG, or any local lauthority, corporation or body constituted by CG or SG Reservation of Name to subscribe which shall nt be less than 1 share & > number of shares each subscriber to Imemorandum intends to take, indicated opposite his name; ~ Name of the proposed 20 days from date of /eservation of name or for registrar may reserve name [>A person may make an application to re Jco. or Name to which co. proposes to change J+ Registrar may reserve name for a fora period of 60 days from date of approval [Application for reservation of name shall be made through web service vaitable a www.mca.gov.in by using [form RUN] (Reserve Unique |Name) along with fee as provided in Companies (Registration offices and fes) Rules, 2014, which may either be approved or rejected, as case may |be, by Registrar, Central Registration Centre after allowing resubmission lof such application within 15 days for rectification of defects, if any und that name was Incorrect information, then— > if co. has not been incorporated, be cancelled /& person who has made application shall be liable to a penalty which may extend to 1 lakh Rs. + ifco, has been incorporated, Registrar may, after giving co. an Jopportunity of being heard either direct co. to change its name within a period of 3 mnths, later passing an ordinary king off name |: make a petition for winding up lof co. [Covers objects for which co. Is proposed to be incorporated & any matter proposed to be situated, memorandum of co. duly signedINCORPORATION OF COMPANY AND MATTERS INCIDENTAL THERETO (Chart 2.4) Articles of Association - AOA (Section 5) Section 2(5)- articles means articles of association of aco. as originally framed or as altered from time tote or applied in pursuance of any previous co. aw or of this Act cd i) According to this doctrine, persons [dealing with o. need not inquire whether internal proceedings relating to contract ar followed correctly, once they are satisfied that transaction is in accordance with MOA Ja.a0A. Pernt Indoor Management Pen) fn case of aco. whateveris not stated in memorandum a lobiects or powers is prohibited by doctrine of uta ices Beers + Contain provisions for entrenchment: | aude ectasd articles may contain provisions for incase of any co, whichis Jentrenchment to effect that specified reistered after provisions of articles may be altered only if |Jcommencement ofthis Act, conditions or procedures a that are more jinso farasthe eg istered restrictive than those applicable inthe case_|Jatces of such co. do not Jota sR, are met or complied with exclude or modity regulations contained in |model articles applicable to such co. articles of aco shall contain regulations for management of co, in case this outsider’ has actual knowledge of irregularity within co, benefit under rule of indoor management would no longer be avaiable. Act which sutra viresis void, & doesnot bind co, lil Stakeholders need not enquire whether necessary meeting was convened & held propery or whether necessary resolution was passed properly latices shall aso contain such matters, as are prescribed under rules. However, aco. Jmay also ncude such additional mattesin its i co. cannot make it valid, + Manner ofincsion of entrenchment provision: i doctrine helps protec external members provisions for entrenchment sall ony be rom co. states that people are ented to rade either on formation of aco,orby an _ | SPRERSSR PES] [resure that internal proceeding are as i with a minimum of effort, regularities within aco. could be discovered, benefit iv) act which s intra vires co. but outside authority of le be directors may be ratified by ican Meiners MAR erste ho swear toa ts management | members of co. in case of a private co. & by a | FEN MtsM ens Js) rule is meant to protect shareholders & creditors of co, JR in case ofa publicco. Iv) doctrine of indoor management evolved around 150 years ago in context of doctrine ot constructive notice Notice to registrar of entrenchment provision : Where ates contin provisions for entrenchment, whether made on formation orby amendment, co. shall gve notice to Revisrar i facts tra vies rectors ony, shareholders can ratty ic ts ura vies aries of association, co.can alerts ates in proper way s) doctrine of constructive notice protects 2 Jcompany against outsiders, doctrine of indoor management protects outsiders against ation of co.INCORPORATION OF COMPANY AND MATTERS INCIDENTAL THERETO (Chart 2.5) Act to override kal ee) UTE UTC ea (Section 6) a) pass such orders, as it may think ft, les of company duly n of management of co. subscribers to memorandum. lb) direct that liability of members shall be untimited or lc) direct removal of name of co. from memorandum & from persons named as first , if any, in articles stat 4) pass an order for winding up of co; or management of any co, or » he has not been found guilty of any fraud or misfeasance or of any breach of duty to any co. lunder this Act or any previous co. law during last 5 yrs Je) pass such other orders as it may deem fit: Provided that before making any order, directors, whether they are registered, lexecuted or passed + co, shall be given a reasonable lopportunity of being heard in matter; persons named as first directors of co. & persons making declaration under + & that all documents filed with Registrar for registration of co. contain information that is correct & complete & true |d) address for correspondence e) particulars of every subscriber to memorandum along with proof of identity tain & preserve at its registered office copies of Idocum« original 2, tll its dissolutionjue Be sud by id fame. lin om eect lncrprtion mentioned eta, co. becomes etal person separate om lecarperates Jo nde proves ot, eo. may purchasers ot ante oth become onotig co. seri deft shal be ible peat of Js 100 each dy dri whic sch | [eft oust vt xen ono | fos nono. where no seri oben fie wth | bei nder doe of bse a) iti eri f180 cos of dteof — ipa Reger hos ena couse tele tha Co srot rig oy business or opeatons he | |ny, without peje to provisions of a- etn (2 cinoma rome of a. fom eit of amples ene cope x |¥ INCORPORATION OF COMPANY AND MATTERS INCIDENTAL THERETO (Chart 2.7) Le eration cf Memorandum Secon 3) Rectification of Name of Company (Section 16) [Aeration by sR: [Dispose of application af change of place of registered office [vil Filing ofthe certified copy of order |with registrar of states fs) Registrar to certify registration on the alteration of objects ets [ijName change of Co Jany change in name of aco. shall be effected only with [approval of CG in writing fon any change in name ofa co, the Registrar sal enter new name in register of Jcompanies in place of old lname & issue afresh certificate of incorporation ith new name [ip entry in register of c's: Co shal eispose of application of change of pace of registered oie within a period of 60 days. Before pasing of order, may satisfy itself that- + alteration has consent of creditors, |debenture-holders & other persons Jconcerned with co + sufficient provision has been made by co. ether for due sscharge ofa its debts & obligations, or + adequate security has been provided tor such discharge. |Where an alteration of memorandum results in transfer of registered offce of a co. from one State to another, a certified [copy of order of CG approving alteration shal be filed by Co. with Registrar ofeach of states Registrar shall register any alteration Jof memorandum with respect to objects of co. & certify registration Jwithin a period of 30 days from date offing of SR [cG i empowered to give direction too. to rectify its name within a period of 5 case may be, from issue of such direction by passing an ordinary resolution pi Alteration to be registered: tte [vii ssue of fresh certificate of incorporation Registrar of State where registered office Is being shifted to, shall issue a fresh certificate of incorporation indicating alteration shall have any effect until it has been registered in accordance with provisions ofthis sec. INo alteration made under this ection where a co. changes its name or obtains a Inew name, it shall within a fi) Only member have aright to participate in divisible profits of Co ae [id Change in registered [i Fling with Registrar in) change in object of the co. alteration of memorandum relating to place of registered office from one State to Janother shal not have any effect unless it is approved by Ce [co. shall n elation to any alteration ofits memorandum, file with Registrar + sR passed by co. + approval of C6 co, which has raised money from public [through prospectus & still has any lunutiised amount out of money so raised, shall not change its objects for which t raised money through prospectus unless a SR through postal ballotis passed by Co, [ny alteration of memorandum, in the case of aco ited by guarantee not having a share capital, intending to give any person aight te participate in divisible profits of the co otherwise than as a member, shall be void ack || Penalty/punishment ("Company | Fine of 0008s for] every day during whieh default conti Every Officer | Fine varyingfrom ‘who is in 5,000 Rs, to 1 lakh Rs. defaultINCORPORATION OF COMPANY AND MATTERS INCIDENTAL THERETO (Chart 2.8) y y Y Conversion of Companies already |) Subsidiary company not to hold ety en er Se cy Cee (Section 19) & Contracts (Section 21) (Emenee [Aco of any clas registered under this Act may conversa co. of ther ss under this Ae by alteration of Jnemorandum & atces ofan Reread {Section 14 & 15) Perry ot (Section 22) eas eee [tprovides modein which eocumentsmay be served on co, Jon members & loon registrars Law with respect to senice of documents isa follows: No ce shal ether by se or through ts nominees, old any shares nits hong co. & no holding co. shall allot or transits shares tanya ts substan co's & any such altment or raster of shares of aco. tots susie. shall be void + Provided that noting in tis sub- [ection shal apply toa case- [JAIN of exchange, hand ar promissory note shal be leeemedtohave been made, acepted, rawn or endorsed on behalf of co. itmade, cepted, drawn, or endorsed in lame of, or on behalf fron ration of arlesincoe erations having ctofconversin of. + private co ito public coor [public nt private co, [Provided further that an alteration having the eect of conversion of public conpny int these may be signed by any | + registered post or co. duly authorised by + speed post or Deen nes required to be done, co. shal flean laneroved by ode of CG on application made in prescribed orm & manner Provided cs thot oppication pending before buna on dete of commencement of [Companies Amendment Act, 2018 shall be | spsedofbyTibunal as per provisions pppication to Registrar wh shal ater ststying hms that provisions apple for registration ofc'shave Jen complied with, ose former eestration ofa eens ai gers essa lessee bmn gf rn weg sneer costae | Rpm brates [Every alteration of articles & a copy of order of || |'ssuea certificate of incorporation in Jeven before it became a subsidiary co. | Fas lense ole dacksta ritual approving alteration, shal beled with Registrar, together witha printed copy of atered sce, within period of 5 days Since en Jay ateration of aries regtered as above sal subject to provisions of this ct, be vai tw sgmaty contained in articles Jame manne ast first registration Serres ee ete repstraton ofa co. under thissection sal nt affect any debts, abies, obligations orcontractsincured or entered into, by or on behalf co. before conversion Hh whee ssi ss lexa representative ofa deceased |nember ofhodingo. i where subsidiary co, holds such otholding co, + leaving at itsrexsteredofceo J+ mean of such eletronic or other idiary co. holds such shares node a maybe prescribed Post, or > registered post or + speed post or + by delivering at his ofc Jb such electronic or other mode [smay be prescribed fi o.may, by writing unde ts fommon sal fany, authorise layperson, ether generally i) Adeed signed by such an attorney on behalf othe co. ander his seal shallind Coie PROSPECTUS AND ALLOTMENT OF SECURITIES (Chart 3.1) ino Public offer & Private Gree |As per Sec 2(70) of the Companies Act, 2013, prospectus means any document described or issued as a prospectus & includes a red herring prospectus referred to in sec 32 or shelf prospectus referred to in sec 31 or any notice, circular, advertisement or other document inviting offers from public for subscription or purchase of any securities of body corporate Paes i) As per Sec 23 (1) A public co, may a) to public through prospectus lb) through private placement Jc) through a rights issue or a bonus issue leer) li) Securities offered for sale to public : lunless contrary is proved, be evidence that jan allotment of, or an agreement to allot, securities was made with a view to securities being offered for sale to public if is shown iii) Person making an offer is Jaco. or a firm : i) Documents which deemed to be a prospectus: fa) where a co. allots or agrees to allot any securities of Co. with a view to all or any of those securities being offered for sale to public, any Idocument by which offer for sale to public is made shall, for all purposes, be deemed to be a prospectus issued bv Co. & Ib) all enactments & rules of law as |to contents of prospectus & as to liability in respect of mis-statements, in & omissions from, prospectus, or otherwise relating to prospectus, shall apply. Disclosure to be made in Deore eee [Deemed Prospectus- Cee eset a) net amt of consideration received or to be received by fa) by way of rights issue or bonus issue a) that an offer of securities or of any of them for sale to public was made within 6 Imnths after allotment or agreement to allot; or [Co. in respect of securities to [b) through private placement offer relates; & lb) time & place at which Icontract where under said |securities have been or are to be allotted may be inspected lb) that at date when offer was made, whole| consideration to be received by Co. in respect of securities had not been received by it.PROSPECTUS AND ALLOTMENT OF SECURITIES (Chart 3.2) Filing of shelf pros any cass or clases of companies, as Securities & Exchange Board may provide by regulations inthis behalf, may file a shelf prospectus with Registrar at stage- Pee ‘tmeans a prospectus in respect of which securities or clas of securities included therein are isued for subscription in one or more isues over a certain period without the issue of a further prospectus a) of first offer of securities included therein which shall indicate a period not, exceeding 1 yr as period of validity of such Jprospectus which shall commence from date of opening of fist offer of securities under that prospectus, & lb in respect of a second or subsequent offer of such securities issued during period of validity ofthat prospectus, no further prospectus is required A co. filing a shelf prospectus shall be required to file an information memorandum containing all material facts relating to new charges created, changes in financial position of co, as have occurred between first offer of securities or previous offer of securities & succeeding offer of securities & such other changes as may be prescribed, with Registrar within prescribed time, prior to issue ofa second or subsequent offer of securities under shelf prospectus Provided that where aco. has received applications for allotment of securities along with advance payments of subscription before making of any such change, co. shall intimate changes to such applicants & if they express a desire to withdraw their application, Co shall refund all monies received as sub within 35 days. tetrad Where an information memorandum is filed, everytime an offer of securities is Jmade under sub- sec (2), such memorandum [together with shelf prospectus shall be Jdeemed to be a prospectus (STE It means a prospectus which does not include complete particulars of quantum or price of securities ) Ce (Section 33) Pichon es [co may issue a redherring prospectus prior to issue ofa prospectus, Daun mcd itmeansa memorandum containing such salient features of 2 prospectus as lmay be specified lby Securities & Exchange Board by making regulations inthis behatt co. proposing to issue a red herring prospectus shall ile it with Registrar atleast 3 days rir to opening of subscription ist & offer. Den [red herring prospectus shal carry same obligations as are applicable to a prospectus & any variation between red hering prospectus & a prospectus shall be highighted a variationsin prospectus Upon closing of offer of securities under this sec, prospectus stating therein total capital raised, whether by wayof debtor share capital, & closing price of securities & anyother details as are notincuded in red hering prospectus shall be filed with Registrar & Securities and Exchange BoardPROSPECTUS AND ALLOTMENT OF SECURITIES (Chart 3.3) y Cree aL Cerne ay 1) Section 29(1) states that every Co. making public offer; & such other class or classes of |companies as may be prescribed under Rule 9 shall issue securities only in dematerialised form by lcomplying with provisions of Depositories Act, 1996 & regulations Imade thereunder in case of such class or classes of unlisted lcompanies as may be prescribed, the securities shall be held or transferred only in dematerialised Jferm in manner laid down in Depostores Act 1996 & regulations made thereunder 2) Any Co, other than co. mentioned in sub-section| (1), may convert its securities into Jdematerialised form or issue its securities in physical form in accordance with the provisions of this Act or in dematerialised form in accordance with provisions of Depositories Act, 1996 & regulations made thereunder. Securities could be held in physical or Jdematerialised form. However public offer of |securities has to be mandatorily in demat form in laccordance with Depositories Act, 1996. Demat lensures fool proof control over issue, sale, lpurchase, pledge, extinguishment of securities liending transparency & credibility to e process & securities markets y 1) Filing of an application with recognised stock fevery co. making public offer shall, before making such offer, make an application to one Jor more recognised stock exchange or lexchanges & obtain permission for securities to Ibe dealt with in such stock exchange or lexchanges Dio nao prospectus shall also state name or names of stock exchange in which securities shall be dealt with (kee eee public shall be kept in a separate bank account ek ead unt coad ccd ed ior eee [any condition purporting to require or bind any ss to waive compliance with any of requirements of this section shall be void fa) Company = fine - 5L to SOL b) Officer = imprisonment upto 1 year or fine - 50K to 3L or both inet [Conditions for payment of commission: 2) payment of such commission shall be authorized in Co's articles of association lb) commission may be paid out of proceeds of issue! lor profit of Co. or both J) Rate of commission - in a scheduled bank & shall not be utilised for Shares Debentures lany purpose other than- a) for adjustment against allotment of securities b) for Repayment of monies within time specified by SEBI ‘= shall not exceed 2.5% of price at which debentures are issued or ied by co's * shall not exceed 5% of price at which shares are issued or * rate authorised by articles ‘* Whichever is less ‘* Whichever is lessPROSPECTUS AND ALLOTMENT OF SECURITIES (Chart 3.4) + Minimum amount subscribed, & application money have been paid & received by Co. + every person who Jauthorises issue of such prospectus shall be liable under sec 447 pplication money shall not be less than 5% or such Jother percentage or amt as specified by SEBI inimum amount not subscribed & application | PAUL uRuLerssd fee eed within 30 days from date of issue of prospectus, or Such other period as specified by SEB! urn a ken ees grounds to believe, & did up to time of issue of prospectus believe, that statement was true or| inclusion or omission was necessary. (eee shall file a return of allotment with the registrar liens [Co. shall pay penalty of % 1000 for each day during |which such default continues, or 1 lac- which ever is. less Weare a) Liabilities of persons: |Where itis proved that a prospectus has been issued with intent to defraud applicants for securities of a co. or Jany other person or for any fraudulent |where a person has subscribed for |securities of aco. acting on any statement included, or inclusion or Jomission of any matter, in prospectus which is misleading & has sustained any loss or damage as a consequence thereof, Co. & every person who- + is a director of Co, at time of issue of prospectus referred to in subsec. + has authorised himself to be named & lis named in prospectus as adirector responsible, without lany limitation of liability forall or any lof losses or damages that may have been incurred by any person who subscribed to securities on basis of such prospectus + promoter of Co, + authorised issue of prospectus; & + is an expert referred to in sub-section (5) of section 26, fb) Exceptions : No person shall be liable if he proves- > withdrew his consent to become director before issue of prospectus + Prospectus issued without his knowledge + Statement made by Expert purpose, every person (2) shall be personally [vany agreement for, or with J view to, acquiring, disposing of, subscribing for, lor underwriting securi- ties; or i) any agreement, purpose lor pretended purpose of which isto secure a profit to Jany of parties from yield of securities or by reference to fluctuations in value of securities; or ii) any agreement for, or Jwith a view to obtaining credit facilities from any lbank or financial institution, shall be liable for action Pree aPROSPECTUS AND ALLOTMENT OF SECURITIES (Chart 3.5) Action by Affected Persons (Section Tac which shall not be less than 6 months but which may extend to 10 years & shall also be liable to fine which shall not be less than amount involved in fraud, but which may extend to 3 times amt involved in fraud ii) where fraud involves public interest, term of imprisonment shall not be less than 3 yrs i) Class action suit is for a group of people filing a suit against a defendant who has caused common harm to entire group or class} ii) class or group of people filing case need not be present in court & can be represented by one petitioner Provided further that where the fraud involves an amount less than 10 lakh rupees or 1% of the turnover of the company, whichever is lower, & does not involve public interest, any person guilty lof such fraud shalll be punishable with imprisonment for a term which may extend to 5 years or with fine which may extend to 50 lakh rupees or with both. ii) Benefit - if several people have been injured by one defendant, each one of injured people need not file a case separately but all lof people can file one single case together lagainst defendant. Fraud of less than 10 lakh rupees or 1% of tumover whichever isles Upto % 50 Lakhs Upto S years | Fraud of equal to or more than 10 lakh Min: amount of fraud and| Min:6months iv) Example - Satyam Scam Tupees or 1% of tumover whicheverisless | May: (amount of fraud) x3 Max: 10 Years Involving Public Interest Min; amount of fraud and| Min: 3 years Max: (amount of fraud) x 3 Max: 10 Years elPROSPECTUS AND ALLOTMENT OF SECURITIES (Chart 3.6) ue Ue iv Every identified person wiling to subscribe to private placement sue shall apply in private placement & application sued to such person lon wth subscription money pad ether by ida private placement shall be made only to aselect group of persons who have een identified! by Board herein refered toas ‘dented persons, whose number sal not exceed 50 or such higher umber as may be prescribed excluding ci & employees of company being ofered secures under a scheme of employees stock option, nF Jano by ash Provided that company shall not uti monies raised through private placement unless allotments made & return of allotments fled wth Regstrarin accordance wit sub-section (8. ii) A company making private placement [alsu rate placement ofer& [elation n such form & manner as ‘means any offer of scutes or imitation to subscribe secures to select group of person by co other than by way of public offer through issue of privat placement offerte. [cheque or demand draft or ater banking channel Coe rut Re TU ar ud sur) [AVA company making an offer orintation nder ths sc sal alot ts securities within 6 days rom date] Notuistanding als to repay application money within aforesaid period, it shall be abet repay that money with interest at rate of 12% pa rom expiry of 16th day Provided that monies received on application under his sec salle kept in a separate bank account in 2 scheduled bank & shall ot be utilized for any purpose other than efor adjustment agains allotment of secures; or b for repayment of monies where companys unable to alt secures [il] No co issuing securities under ths sec shall release any public advertisements rule any media, marketing or istribution channel or agents to inform publica lrg about such an issue /) Notes offeror invitation under this section shall be made unleslltments with respect to any oe or invitation made eater have been completed or that offeror invitation hasbeen withdrawn or abandoned by the company |may be prescribed to identified persons, whose names & addresses are recorded Joy ompany in such manner as may be Provided tat, subject to maximum numberof dented persons under sub-sec(2)a company may, tay time, make more than oe issue of secures to such clas of denified persons as maybe prescribed. vi) A company making any allotment of secures under this sec, shal file with Registra return of allotment within 15 days from dat of allotment in such manner as may be prscied, including a complet list of al allotees, wth thei ull names, addresses, numberof securities lotted& such other relevantinfo, a may be prescribed a) a company defauts in fling return of allotment within period prescribed under sub-e[8), company, ts promoters & directors shall be liable toa penalty for each default of 1000 rupees foreach day during [which such default continues but not exceding 25 lakh rupees i subject to subse) iaco. makes an ofr or acepts monies in contravention his section, company, is promoters & directors shale able for a penalty which may extend to amount rased trough te private placement or 2crore Rs, whichever ower, & co shall also refund all monies with interest as specie in subse. (6 to subscribers within a period of 30 days of oder imposing penaltySHARE CAPITAL AND DEBENTURES (Chart 4.1) Share Capital - Types (Section 43) Section 2(84) of the Companies Act, 2013 defines share as a share in share capital of a co. & includes stock. Vv Tre ce i) Shares which are not preference shares are termed as equity shares. ii) Equity shares are further classified as plain vanilla (same voting rights) or Differential equity shares (with differences w.r.t. dividend or voting rights or otherwise) Decoy capital. liv) Restriction on conversion of equity share capital with voting rights into equity share capital carrying differential voting rights : co. shall not convert its existing eq. share capital with voting rights into eq. share capital |carrying differential voting rights & vice-versa Conditions for issue of equity shares with differential rights :- fa) AOA of co. authorizes issue of shares. with differential rights payment of a declared dividend to its shareholders or repayment of its Imatured deposits or redemption of its preference shares or debentures lb) issue of shares is authorized by an lordinary resolution passed at a GM of share holders Iv) Rights to holders of equity shares with differential rights : holders of equity shares with differential rights shall enjoy all other rights such as bonus shares, rights shares etc Jcould also participate in equity poo! post preferential entitlements (Voting power in respect of shares with differential rights of co. shall not exceed 74% of total voting power including voting power in respect of equity shares with differential rights issued at any point of time; Je) co. has not defaulted in payment of dividend on pref. shares or repayment of Jany term loan or interest payable thereon or dues with respect to statutory| payments relating to its employees to lany authority or default in crediting Jamount in Investor Education & Protection Fund to CG lh) co. has not been penalized by Court or [Tribunal during the last 3 years vi) Particulars of shares to be maintained in register of member |Where a co. issues eq. shares with differential Irights, Register of Members maintained under section 88 shall contain all relevant particulars’ lof shares so issued along with details of shareholders le) co. has not defaulted in filing financial statements & annual returns for 3 FY immediately preceding FY in which it is decided to issue such sharesSHARE CAPITAL AND DEBENTURES (Chart 4.2) v So ¥ T Subject tothe provision of section 43, section 502) & section 188(1,— Variations of shareholders rights (Section 48) Physica entidement oa partclar portion of share capitals rim face evidenced by way of ashe cericate which ast be I Distintivey numbered; & i) Tobe issued under common seal of Co. or signed by [two directors or bya director & C, wherever Co has appointed a. pt present there are 2 depositorisin nia: NSDL & cos with various depository participants (OF inked to them li) Demateralised securities are held by investorsin theirrespecive accounts wth DP. DP keeps track of transfer, transmission, charge creation etc i share certificate issues by aco. could beina way compared to curency nates issued by Cental Bank lv) wrongdoer ois punishable with monetary penalty of to 10 ies of ace vale of shares involved rR. 10 Jer whichever higher. sever officer in defautislableto imprisonment ranging rom 6th to 10 yrs along wih monetary penalty of 3 times rau (Sec 44) voting right of meer olding eau share capital: shares whois hlding ea share cai, shall have aright to vote on every resolution placed before Co.; and his voting right on a pol shall be in propotion this share in paid-up lea share capital of Co. i Voting right of member holding oreterence shar capital: shares whos holding any preference share capital shal in respect of such aia have :) ight to vote only on eslutions paced before Co lb any resolution for winging up of co. efor repayment or reduction ofits eauity or preference share capital & his voting right on a poll sal bein proportion to his share in the paid-up preference share capital ot co, Every member of co. ited by Every member of ao. imited by i) Proportion of voting rights |) proportion of voting rights of eg, shareholders to Jotng rights of preference shareholders shal bein same proportion a paid-up capital b] Where dividend in respect ofa cas of preference shares has not ben paid fora period of 2s or |morethere such clas of preference shareholders shall have right to vote on all eslutions placed before co encase of equity shares other than equity shares with diferent voting rights, each shareholders ented to vote on any resolution placed before Co. [Ina meeting of pret. shareholders, preference Joting right are proportionate to one's pref. share investment to total nominal pret. share capital in Co. le) For other shareholders meeting preference shareholder could ote ony on below resolutions placed before members where resolution in question + irc affects rights a pre. shareholder + involves winding up of Co > involves repayment or reduction of equity or preference share capital. Variation nights of shareholders with consent [Where a share capital of Co. is sivided ino citferent classes of shares, rights attache to shares of any class may be varied with consent in writing of holders of ntless than a/ath ofisued shares of that dass Jorby means ofa SR passed ata [separate meeting of hoders i Binding decison ofwibunal decision of Tribunal on any application shal be binding on share olders [i ing copyoforderwith |] titra: co skal within 30 days of date of order of Tribunal, fle copy thereat wth Registrar. ilo consent for variation where holders of not essthan 10% ofissued shares ofa class didnot onsen to such variation or vote in [favour of for variation, they may apply to Tribunal to have variation canceled, & where any such applications made, variation shall Jnothave effect unless & uti is confirmed by tribunal [Wher any defaults made co. [Application shal be made within 2 ays. /) Defaut in compliance with provision shall be punishable wth ne which shall note ss than 25,00 Rs but} Jwhich may extend to Slakh Rs. & lever office of co, who sin defatshallbe punishable with imprisonment for aterm which may extend to 6 months or with kine which stall ot be es than [5,00 Rs ut which may extend to lakhs, or with bothSHARE CAPITAL AND DEBENTURES (Chart 4.3) CS Te ais MeV elem iui isc seni la COREY) shares (Section 52) cals are made by Co. on security holders to | [) Where a co. issues shares ata premium, whether for cash pay amount called upin respect of partly pai | Jor otherwise, a sum equal to aggregate amt of premium up securities received on those shares shall be transferred to a securities Ii) As perSec 49, these calls have to uniformly | [premium account Imade & there should be no differentiation for a given class of security holders i) Fine for Contravention - [Company -Rs. 1 Lakh to Rs. 5 Lakh Joffcer- Imprisonment - upto 6 mnths or - Fine -RS. 1 Lakh to Rs. 5 Lakh Jor Both i) Application of securities premium account- Ja) towards issue of Bonus shares b) in writing off preliminary expenses Jc) In writing off expenses of, or commission paid or Jdiscount allowed on, any issue of shares or debentures. ld) In providing for premium payable on redemption of any redeemable preference shares or of any debentures ii) The provision isnot applicable in case lwhere different amounts are paid fora same cass for security. Iu) As per Sec. 50, if authorised by articles, a Jeo. can keep advance subscription or call money received in advance lv) Notwithstanding anything contained in sub-sec. (1) & (2) aco. may issue shares at a discount to it creditors when its debt is converted into shares in pursuance of any statutory resolution plan or debt restructuring| |scheme in accordance with any guidelines or directions or regulations specified by RBI under the RBI Act, 1934 or Banking (Regulation) Act, 1949). Where any Co. fails to comply with provisions of this section, such Jcompany & every officer in default shall be liable to penaity which may lextend to an amount equal to amount raised through issue of shores at discount or Rs. 5,00,000/-, whichever islss,& Co, shal also be liable to efund all monies received with interest @ 12% per annum from date of issue of such shares to persons to whom such shares have been isued Je) for purchase of its own shares under sec 68. ii) Who may apply the securities premium account - a) in paying up unissued eq, shares of Co tobe issued to Imembers of Co. as fully paid bonus shares; or |¥) Co. could pay proportionate dividends in Jproportion to amount paid on each share, if [authorised by articles (Sec $1). i) advance payment will never lead to increased voting right but delayed payment of call money could be reason of decreased voting rights. lb) in writing off expenses of or commission paid or discount| allowed on any issue of eq shares of co.; or c) for purchase of its own shares under section 68.i) Section 2(88)- sweat equity shares means such eg, shares as are issued by aco. to its directors Jor employees ata discount or for consideration, other than cash, for providing their know-how or making available rights in nature of intellectual property rights or value additions, by whatever name called; i) Section 2 (37) - employees’ stock option means option given to directors, officers or lemployees of aco. or ofits holding co. or subsidiary co. or co's if any, which gives such directors, officers or employees, benefit or right to purchase, or to subscribe for, shares of Co. ata [future date at a pre-determined price SHARE CAPITAL AND DEBENTURES (Chart 4.4) ¥ Ven RONG OTS oo a ee eee, ST Ra UN RUT a eT) Preference shares - Issue and redemption [Section 55] a) issue is authorised by a SR 1b) resolution specifies number of |shares, current market price, jconsideration, if any, & class or classes of directors or employees |to whom such equity shares are |to be issued i) Co. to issue redeemable pref No Co. limited by shares shal issue any preference shares which are irredeemable li) Period for redeem of pref shares : pref shares are liable to be redeemed within a period not lexceeding 20 years iv) Redeemed shares to be fully, paid : ho such shares shall be redeemed unless they are fully paid; \) Proposed shares to be redeemed shall be transferred to CRR account Jc] where eq, shares of co are listed on a recognised stock Jexchange, sweat eq, shares are issued in accordance with regulations made by Securities & Exchange Board in this behalf & if they ae not so listed, sweat eq. shares are issued in accordance rules as prescribed under Rule a sum equal to nominal amount of shares tobe redeemed, to a reserve, tobe called Capital Redemption Reserve( CRR) Account ii) Shares to be redeemed out of |No such shares shall be redeemed except out of profits of co. which would other- wise be avaitable for dividend or out of proceeds of afresh issue of shares made for purposes of such jredemption vi) Cass of co's whose financial statement complies with Accounting standards : Premium, if any, payable on redemption shal be provided for out of profits of co, before shares Jare redeemed — vi) Incase of unredeemed pref shares : (Co. May- a) with consent of holders of 3/4th in value of such pref. shares, & b) with approval of Tribunal ona petition made by it in this behalf Jc) issue further redeemable pref. shares equal to amount due, including dividend thereon [i Paying of unissued shares to members: [CRR account may, be applied by co, in paying up unissued shares of co. tobe issued to members of Co. as fully paid bonus shares.SHARE CAPITAL AND DEBENTURES (Chart 4.5) Transfer and Transmission of Securities or Interest of a Member in the Company (Section 56) ag Ps Ae ed CeCe) ) Requirement for registering transfer of securities Diecut LeU |Co. may register transfer lon such terms as to indemnity as Board may think ft Siero reer ReIecre Transfer of any security or other interest ofa deceased person in a co. made by his legal representative shall, leven if te legal representative is not 2 holder thereof, be valid asif he had Jbeen holder at time of execution of instrument of transfer [co. shall not register a transfer of securities of Co, or interest lof a member in Con case of a co. having no share capital, unless a proper instrument of transfer, duly stamped, dated & executed by or on behalf of transferor & transferee specifying name, address & loccupation, if any, of Where an application is made by transferor alone & relates to partly paid shares, transfer shall not be registered, unless co. gives notice of application, in such manner as may be prescribed, to transferee & transferee gives no objection to transfer within 2 lweeks from receipt of notice i) an owner of any security or interest in aco., or ti) of any share warrant or coupon issued in pursuance ofthis Act, & eerrenc Coe teed Power of co toreister shall not be effected by above provision on receipt of an intimation of |transmission of any right to securities by operation lof law from any person to whom such right has been transmitted. Peers er) Peed eed In thecasofsubsctestothe | Wihin2 months fromthe | mearandum; date ofin-corpration i) thereby obtains r attempts to obtain any such security or interest or any such share warrant or coupon, or [Company - 25,000 Rs. to 5 lakh Rs. officer - 10,000 Rs. to 1 one lakh Rs. transferee within a period of 60 days from date of execution along wth certificate relating to securities, orf no such certificate isin existence, Inthecaseofanyalotment | Witina period of two months ofan ofits shares from the date of alotment frien inte cota tanseror | Wikinapedotone mann || Where any depository or depository tensmisionolearis | ome dite cre byte | participant, with an intention to copy wne | etraud a person, has transfered tae orteatatoncl I hares, it shall be able under section liv) receives or attempts to receivel jany money due to any such ransssion . Fine - along with letter of allotment £ ie |imprisonment- 1 yrto 3 yrs Fine fF cecunitien Inthe case ofanyalltment | Withina prod of simonths Nt Lakh Rs, to 5 Lakh Rs, e 2 of debenture fromthe date of lotment 2 matic eal UaioeSHARE CAPITAL AND DEBENTURES (Chart 4.6) Do Rec L Ce cle cus ace] es ¥ Lede ua oe i) ifa private co. limited by shares refuses, to register transfer of, or transmission of right to any securities or interest of a member in Co., then co. shall send notice of refusal to ransferor & transferee or to person giving intimation of such transmission, within a period of 30 days if) Transferee may appeal to [Tribunal against refusal within a period of 30 days i) fa public co. without sufficient cause refuses to register transfer of iv) Tribunal, while dealing with fan appeal may, after hearing parties, either dismiss appeal, or by order— a) direct that transfer or transmission shall be registered by Co. & Co. shall comply with jsuch order within a period of 10 days of receipt of order; or lb) direct rectification of register |& also direct Co. to pay damages, if any, sustained by any party laggrieved. securities within a period of 30 days, the transferee may, within a Jv) fa person contravenes order lof Tribunal - period of 60 days of such refusal or where no intimation has been received from Co., within 90 days appeal to Tribunal. Imprisonment - tyr to 3yrs Fine - 1Lakh to 3Lakhs i) Remedy to aggrieved for not carrying changes in register of members : may appeal in such form as may be prescribed, toTribunal, or toa competent |court outside India, specified by CG by notification, in respect of foreign members lor debenture holders residing outside india, for rectification of register. ii) Order of the Tribunal: either dismiss appeal or direct that transfer lor transmission shall be registered by Co. lwithin a period of 10 days of receipt of lorder, or direct rectification of records of depository or register & in latter case, direct |co. to pay damages, if any, sustained by party aggrieved Mittal of member [Section 59] Provisions of this section shall not restrict right of a holder of securities, to transfer such securities and any person acquiring such securities shall be entitled to voting rights unless voting rights have been suspended by an order of Tribunal liv) Where transfer of securities isin |contravention of any of provisions of the Securities Contracts (Regulation) Act, 1956, the Securities & Exchange Board of india Act, 1992: direct any co. or a depository to set right contravention & rectify its register or records concerned. [\) Default in complying with the order [Company - Fine - iLakh to SLakh Officer - Imprisonment - upto 1 yr or -Fine - 1Lakh to 3Lakh or bothny iso authorised bys atices ater is memorandum in ts GM to lines ts authorised share capital cost ide aor any ots share caitaitsharesfaarer amt than is exiting saes ome aor any ois ly pid shares stot, recover that toc int ily uid shares of any denomination; subsets shares, or any of them, into sare of smaller at than ised by memorandum cance shares which t ate of psig fest in that beh, hae atbeen tate or are tobe taken by | any ptson, cancelation of shares shal notbe [ezmed tobe areductono share Fated aig astral SHARE CAPITAL AND DEBENTURES (Chart 4.7) Further issue of share capital - Rights Isue; Preferential Allotment [Section 62] [DATs sue ivohes pre-emptive stsciption isto buat sets inaco. fered te existing eury oder isnot porta ayo risa ico. having share cpl proposes to inese issued apa byise of fate shares, jchsharsshalbe ofeed— opens who atte of ofr are ders of ey stares of on proportion to pai share ital lb oemployees under ascemeoenpoees’ stock option, abject pase by, cto any persons itis authored bya, wheter ernot thse personne persons refered to incase or clase eter for cas oro consideration ter tan cash, ie sch sharesis determined by vaatonrepor oa reseed lest tocompance with splat provisions of Cap & anyother nos as maybe prescbed apt i Wore offer cf shares shal be despatched [through registered post or speed post or though |ecronc moder cour ora ter mode hang prot of lvery toa existing shareholders at east podaysetre opening oie i iceptn- section shalt pp increase ot scribed capital of co. cued by exercise oan etn atached a debentirs sued ron aed yc to cme sich eben ols ito shares in, JW Convenionfdebenresinan na shares: on sich tems &condtions as peat Goverment oberexonablincrastanes of ase event tes ose ct such deers ring of flan dont stem pring fran oto such comers, Wem of comerson ot aepabletoCo: co. may, tin dyson dt of commun osuch oes, appeal bunal hich sall er heating. Goverment pas such oder ast deems il ons toe taken ito consideration for term of comerion: ln eterining terms & condos of i} When menor fa. tard ated incase authored share cpt Where Governments, by an re etd tat ay debe oon r any par there shal be comet saresin aco. & Wheren ape as en pred to banal or whrsuch apealas been ismised hen memorandum fc. by chor having ef of increasing authorised share captalof a, standard athe share capil of sh costal sandinzeasedby an amour equal amet of ae shares which ach eebertures los part thereat has been comet in, cant shareholders Bonus stares are shares issued proportionate by ca tots sul paid shares ree of any cos. ico. may sue fully psu bons shares tots meters nay mane whatsoever, ot ES aise reser; sets pei ect cre acount ried tat ise rons shares sal be made by citing freseres created fechatn tases fi Thebons shares sal not bese in fil No co stall apase ts pots oc eserves for pupse af sing uly psi-upbons stares ules itis aorie bytes, thas on recommendation of Board, been authorised in ofa; cits ot dfatedin payment of ltrs or pin inept of fined epost or debt seuiiesised byt; e)ithasnot detautedin respect ot payment tion des of employes, such, cotton to provident fan, att & bons; el artypaitp hrs itany ousting on date of aloten ae ade ful pit, fitconpes with such conditions as lev vided nay be presce[ SHARE CAPITAL AND DEBENTURES (Chart 4.8) rele) Peed Registrar for Alteration of Share Capital (Section 64) onotnt non Direc) Som anna CLC cena [Tribunal may, ifitis satisfied that debt or |WRaibcso2 EISSN Iwhere name of any creditor entitled to object to claim every creditor ofco. hasbeen | Mca reduction of share capital under this secs by tischrgedor determined or hasbeen secured reason o his ignorance of proceedings for Joris consent obtained, make an order reduction oof their nature & eect wth respect confiing reduction of share capital on such his debtor cai, not entered on ist of terms & conditions at deems fit cedtors, & ater such reduction, co. commits 3 deft, within the meaning of section 6 of Insolvency & Bankrupty Code, 2016, [application by Co, aco limited by shares orlimited by guarantee & having a share capital may, by a SR, reduce shar caitlin Jany manner & in particular, may- a) co atersits share cpialin any manner specified nse (1) lb) an order made by Government under sec 62/4) read wit 626) has the eect of increasing authorised |apital of aco, or member of, pastor present, shall not beable iv) Publishing of order of confimation of | METRE) fen respect of any share held by] him exceeding amount of ditterence, i any, between amount paid onthe share, a) extinguish or reduce lability on any oft shares in respect of share capital not paid PIeInoeee fa} knowingly conceals name of any creditor Jc) aco. redeems any redeemable preference shares, ico. sll file a notice in prescribed form with Registrar [within a period of 30 days of such Ib either with or without extinguishing or [reducing iablty on any of its shares,- + cancel any paid-up share capital whichis lost or is unrepresented by availabe assets; lor Princeton possi lor reduced amount if any, fl emt Sats tat |which is tobe deemed to Jb} numberof shares into whichitistobe _|Thave been paid thereon, 8, divided; amount of share as fixed by] |) amount of each share; & ocd of reduction 4) amount, it any, a date of registration [deemed tobe paid-up on each share, to etc ory) Registrar within 30 days of recip of copy of Cee et order, who shall register same &issue a [company -Fine-Slakh to 25Lakh certificate to that eect. [debtor claim of any creditor; or c) abets ors privy to any such concealment or misrepresentation as aforesaid he shal beable lunder sec 447. + pay off any paid-up share capital whichis in excess of wants of Co, alterits memorandum by reducing amount ofits share capital & of ts shares accordingly Btn Lo eeeSHARE CAPITAL AND DEBENTURES (Chart 4.9) Buy back of securities (Sections 68-70) Buber 3. om ees isa reuning nee ones |i! Afundamental prince |) Exceptions Diseiskiksddanaadkatestdiel oascael Jot Company Law was that 2) ending of money by a [a Sources of funds for buyback of shares | no offer of buy-back, shall be made within a |]e) Declaration of Solvency [Register of Buy Back |escametanison — oingain oye eres peotetyertom ce stourect licensing fe ICotl mans acer Whee purer tsom test [ [snes Mea es ey enact bac tay cherries resets sotourt, | ee rsenes eesti im cn, [seine shes Jo ovsnismdebyac, |p tiue oan sheesor ter cwetowdctniaa— Yenidrstin perce fen asom ep tronic less forty povanee& hang |frlending of mneyin | spced sects Farexarendoenapma teatro cs pi needle anterdwac liectalstattve acdc wihamcene |lea tet aykinttsesorte: Vomcrctnennpronersnspomeon|pitebemerbet teed rclatorctiaese: —liceactseh vate stalbedicontin Jwerobyiscwn —hmroediyen thst |loctetcuriecoicteseieotcl [pseseeccempnerereansny een otf tt [pcs diet epising bese haepeael [proceeds ofan earlier issue of same kind of —|Istatement stating - Pesce ene (ey eae reduction of share capital hares na ata ofa, ec ig sya pict nay bid yet [persons in employment af Co. |+afull& complete disclosure of all material [bors shares, etn eco ls [eee fiw pbicco sal pe, [MME ome oan) Coo rbd + ecesiy for buyback txtngdhment Secures | Feet wth epstarand | Eee Jere éecor—fnomcteete ee | baritsachriedyisondes —[ecasclsiaeseertsinedate |fetalenega pst |eSeartencciage | VV recy ery war ae Tc eon pred ney bck sry shesrscerse [onde iti 3ay. |B) nee ety ene uae fees oo scent Buybck i, 10% ore oft ais amour eines der bapa POU Ack within’ as oa fw shares or ote speed series: fees [i Contavention uP eaay cpa te reserves of Co, such sin init for completion ofbupack || someon of burch. | Feral for Daa J Tough any sbi co ncn ts on nace [One-third by ord by opine ahaa tik fbi er Leary ah stan essotaresotonpaseéstitsmetig Tent conplen ol byt ftir -imprscoment-pt3 |} Traughanyinesiestx, opt lemecin it, |fot-moisoaent- pes [wnt oriston eof st | oP fraser sme casioe pucaorstsion las tFne-salbto | tpt 2c gree i ere acocomptesatoy]fine-tLhtosttner fades nadey epee neetobemae bya rata reco erate ent tints aw et intestate, pes tort soet esi acisetretan2t [oom xyes rary Bed nite nde feseton etree [reine rns Praseareemas hdesorapepoe bizar Yetta tat ibe ere enor eetl he Wereureercl i icecavu Veneoenace suet same kindof ses feist at [accordance with regulations made by SEB! |] by purchasing securities issued unde scheme| [eeeteencenenany [eee see use tin est ety B|SHARE CAPITAL AND DEBENTURES (Chart 4.10) sper Section 23) eheme ces bert sch Dns ary ee tome cmp ering dt wheter Conpnes hr ptl bebo ls, 204 ensing ure cn ses operat a roves lesrte ae &imesiment ard con 6:ho te RL, 1928 fr Inert nb case) aisrumens ered chapter of RA 93 ad lam invest of eens mataing ng | oun Fiance Congo eters theo scon 2 headin Js chteristramer, may be presrbedby ln cnn hed by cay sl tbe ted endothe dye macho | atone aig at OR tense rat Ac 0 res necro wth te coating laser ced debentures, |lrencambered one by eon: or threo whch inte [Tiectaetorceswihanepionts —|[WOaenwetseetopatetmieatal — flv treen aera lorie dconpoes te lode be fo con ne: scents pevimerton dete cone sate ceatdone/ pest te lode of Dstt oNof Hevea lof Henson Tas et 182: lo maysuedebenres whan opts |i by of ee Tater brlmay,on plain fama: ite fepaymet of ies; ostondg debenares ponds omet fomeruchdeberuresinto stares eter Hany provncortanedinatust deed ir |ftdebenre tlds, oabence links wih respect to aderey of ORR || nese ca. icoveredin tem Artem | HE Seated hove [bly or party attme of redemption |lrecrng ise of debentures, rin any contrac | trate ae herr partes mestment or depts, othe cose maybe, || of sb-clue i af clause (or tem a) | ant used fr ony purpose |with debenture-holders secured by trust _|}concerned, direct, by order o. to. shot be os unde: of sub-ciuse fi of cieuse fit shat on or |) her than for redemption of iia Remar |i tlbetinotr tation lfoemsdeeteithon — nen nrngiepeatnesiney [Penner tart ae Cea etectempig set rtton surety wen _|| Oe ri eto leerntyaghinarn anya‘ een. re eee diam A ortn ef hcene [ta ahead arr exo where show dere | oxi mcorireetocerat Jl nro io ne atm) of ) cred ebenesmaybe sed aco, foe de gene reotdothise | bun ewes eae eer cpet ete case nc prt comere [ube to such terms & conditions s may be }trstet, having regard to provisions of trust Horscer-imprsonment- Upto 3 ys or |i or ther Financial Istittions within the ||"0Y be © sum whch shal nat be less than |} debentures, ORR shal be created eben tle stn on binary pome atorty ee zbntstath cbt Imani) ofecton othe |S%of tanto tr aeemrer mang rept ofnoncamerie esceion Jig ye eno the dy of fi cain of cetenrelenpn ne Fa sete peromanen ferns | 2nvene At 21, Ole ws medascen ard esos coat trate pair [reset nares mavens [oh ener epencorere acres hh bra [cst creates Dn acount out of profs i To pay niet redeem ebentres lan ebentues fo maybe enforced ayer ed companies (tetera no |Iodedin -cs otc mfr payen ct everday ines dem eens Peete peccperomane. | Iran sured ekg Cngees ponte eons renaig mene te ome ceded amet retest sch acum hana | cranes 8 candtns he [ssccfeinsbcte 6Rst Harare te cme bt a a tbe ed by be tities by co. except forredemption of |lisue Layprocere tape preibedby Car] the lowing cases any tine fal eow 15% ote amount oe | company ence fr the purpose fecrae rg otptte tte Trrtty |G may rete proe rg nce ofc of detemres- | eee mating ring the yeni, ecempon a teres [Fintan on ive ot pronpena/ oer] ebentue ee feisect bens tomate fornarcerpiera waht ander |} iv of Macho tty. nates pute: erst nine debeme ruse comes [ébeare st cee proce for lcin aA he RIA 1348 0° noc. shalssue a prospectus or make an ||#conchsion that assets of co are insuficent||tebenture-holders to inspect trust eed |1Hocsing Finance Companies registered with (forthe purpose of sub-iowse (v, the [toon copies tere,cuatumot ncn using an ater ecinvtate top ots members "ee obec inset scare patents nets eos or mete he exceesng 00 for sebscpion ots [principal amounts when becomes ue, |fibente redemption vse reguted fr te ted compos cee may be, aes flows foe [isc tarecenytesyeourtcee|fotecurad 6 acheter nate mech ht i 5 ices of rate ped detente) deposs wh any scheduled bank fe essed estes AB, Jom anya sees ents oerig pron al mange chests on vate escheat hax ay be cringe yt abies ca ranted cmpanes te torAt_ [lnanrambeed scutes te Car ected, [nar cesie recess iteessot ise anstinsans & Big lem ate Government [beware ees. [empanesasspecein bios i)-ACCEPTANCE OF DEPOSITS BY COMPANIES (Chart 5.1) i) section 2(31) of the Companies Act, 2013, term ‘deposit’ includes any receipt of money by way of deposit or loan or in any other form, by a co., but Jdoes not include such categories of amount as may be prescribed in consultation with RBI. i) following categories of amount may not be considered as deposit— fa) Any amt received from CG or SG, or fromany _|]h) any amt received froma person who, at time Jother source whose repayment is guaranteed by |Jof receipt of amt, was a director of co. ICG or a State Government, or any amt received {from a local authority, or any amt received from a [statutory authority constituted under an Act of Parliament or a State Legislature In) amt brought in by promoters of co. by way of lunsecured loan in pursuance of stipulation of any lending financial institution or a bank i) amt raised by issue of bonds or debentures secured by a first charge or a charge ranking pari lpassu with first charge on any assets, excluding intangible assets of Co. or bonds or debentures Icompulsorily convertible into shares of co. within 10 years Jo) amt accepted by a Nidhi co. in accordance with| section 406 of the Act. p) amt received by way of subscription in respect lof a chit under the Chit Fund Act, 1982 lb) Any amount received from foreign IGovernments, foreign international banks, multilateral financial institutions etc |) Amt raised by issue of non-convertible [debenture not constituting a charge on assets of [Co. & listed on a recognised stock exchange as per applicable regulations made by Securities Jand Exchange Board of India. Iq) amt received by co. under any collective investment scheme in compliance with regulations framed by SEBI. jed as a loan or facility from any r) amt of 25L Rs. or more received by a start-up co., by way of a convertible note in a single tranche, from a person. Jd) amt received as a loan or financial assistance {rom Public Financial Institutions k) amt received from an employee of co. not lexceeding his annual salary under a contract of lemployment with co. in nature of non-interest, bearing security deposit; Je) amt received against issue of commercial Jpaper or any other instruments issued in Jaccordance with guidelines by RBI s) amt received by a co. from Alternate Investment Funds, Domestic Venture Capital Funds, Infrastructure Investment Trusts & Mutual Funds registered with Securities & [Exchange Board of India in accordance with regulations made by it. If amt received by a co. from any other co. lg) amt received & held pursuant to an offer made jin accordance with provisions of Act towards |subscription to any securities so long as such amt is appropriated only against amt due on allotment of securities applied for terest bearing amt received or held in im) Amt received in course of, or for purposes of, business of co. ~ as an advance for supply of lzoods or provision of services accounted for, as Jadvance(rn ees Ja) any member of co.who has made a deposit with co. in laccordance with provisions of |sub-section (2) of section 73 of the Act, or b) any person who has made a Jaccordan ors oly Jsection % Every Pea Company It means a public co., having a Rs. or a turnover of not less thar prior consent of co. in GM by means of a SR & also filed said resolution with Re before making any invitation to [Public for acceptance of ldeposits. Inet worth of not less than 100 cr| 1500 cr Rs. & which has obtained rar of Co's i) Restriction on acceptance of eeu [Exception - a) banking company, |b) Non- banking financial company |c) Housing Finance Company a) other co. as CG may specify, after _|[eonsutation with met iene o oe [Every deposit accepted by a co. shall be repaid with interest in jaccordance with terms & conditions lof agreement. Mini nro in! depositor concerned may apply to [Tribunal for an order directing co. to pay sum due or for any loss or Jdamage incurred by him as a result lof such non-payment & for such lother orders as Tribunal may deem Piers Eee [deposit repayment reserve account shall not be used by Co. for any purpose other than repayment of ldeposits fa) issuance of a circular to its members including, therein a statement showing financial position of Co., credit rating obtained, total number of Jdepositors & amt due towards deposits in respect lof any previous deposits accepted by Co. b) filing a copy of circular along statement with Registrar withit date of issue of circular; Jc) depositing, on or before the 30th day of April Jeach year, such sum which shall not be less than, 20% of the amount of its deposits maturing during. the following financial year and kept in a scheduled bank in a separate bank account to be called deposit repayment reserve account such 30 days before 1d) Certifying that co. has not committed any [default in repayment of deposits accepted either before or after commencement of this Act or payment of interest on such deposits & where a Jdefault had occurred, company made good default &. a period of 5 years had lapsed since date of making good default; le) providing security, if any for due repayment of Jamt of deposit or interest thereon including. [creation of such charge on property or assets of Ico. + Exception fa) which accepts from its members monies not exceeding 100% of aggregate of paid up share capital, free reserves & securities premium Jc) which fulfils all of following conditions, namely J+ which is not an associate or a subsidiary co. of any other co.; + if borrowings of such a co. from banks or financial institutions or any body corporate is less than twice of its paid up share capital or 50 cr Rs., whichever is lower; & > such aco. has not defaulted in repayment of such borrowings subsisting at time of accepting |deposits under this section: Provided that company referred to in clauses (A), (8) or (C) shall file details of monies accepted to Rey rar in such manner as may bea ACCEPTANCE OF DEPOSITS BY COMPANIES (Chart 5.3) [On & from commencement of these rules, il No co. referred to in sub-section (2) of section 73 shall accept or renew any deposit fa) no co. shall accept or renew any deposit, whether secured or lunsecured, whichis repayable on |demand or upon receiving a notice within period of less than 6 months or Jmore than 36 months from date of acceptance or renewal of such deposit Jb) such deposits shall not exceed 10% lo aggregate of Paid- up share capital, free Reserves & securities premium faccount of Co. & Jc) such deposits are repayable not earlier than 3 months from date of such deposits or renewal thereof. from its members, it amt of such deposits together with amt of other deposits outstanding as on date of acceptance or renewal of such deposits exceeds 35% of lageregate of Paid-up share capital, free [Reserves & securities premium account of Co. [i] No Government co eligible to lacept deposits under sec 76 shall accept or renew any deposi, if amt of such deposits lrogether with amt of other |deposits outstanding as on date of acceptance or renewal exceeds 35% of aggregate of its Paid-up share capital, free Reserves & securities premium account of Co. a) any deposit from its members, if amt of such deposit together with amt of deposits outstanding as on date of acceptance or renewal of such deposits from members lexceeds 10% of aggregate of Paid-up share capital, free Reserves & securities premium fi) Where depositors so desire, deposits Jmay be accepted in joint names not exceeding 3, wth or without any of ciauses, namely, “Jointly” “ither or Survivor’, “First named or Survivor’, "anyone or Survivor”. account of co. anyother depos, iat of such deposit together with amt of such other depos, other than deposit referred tain clause), outstanding on date of acceptance or renewal exceeds 25% of agaregate of SC free Reserves & secures premium account of o, fi) co shall not reserve tol] ether eirety or indiectiy a ight toler, to prejudice or disadvantage of depositor, any ot terms & conditions of depos, deposit trust deed & deposit insurance contract ater advertisements issued & deposits are accepted. For purposes of providing security, levery co. refered t in sub-section (2) of section 73 & every eligible co. inviting secured deposits shal provide for security by way ofa charge nits assets, excluding intangible assets of co. for due repayment of amt of deposit & interest thereon for an amt which shall not be less than amt remaining unsecured by deposit [vi No co. referred toin subssec (2) of section 73 or any eligible co. shall invite or accept or renew} lany deposit in any form, ca arate of interest or pay orokerage thereon at a rate exceeding maximum rate of interest or brokerage prescribed by RBI for acceptance of deposits by Nar (ila) Every eligible co, shal obtain, atleast once in a year, credit rating for deposits accepted by it & a copy of rating shall be sent to ROC along with return of deposits in Form opr. lb) credit rating shall not be below minimum investment Jerade rating or other specified credit rating for fixed deposits il Security (not being in the nature of] pledge) for deposits shall be created in favour of atrustee for depositors on a) specific movable property of co, oF lb) specific immovable property of co. Jwherever situated, or any interest therein,No co. referred toi sub-sec (2) of sc 73 of any eligible co. shall issue a circular or advertisement inviting secured deposits uness co. has appointed one lor more trstes for depositors for creating security for |deposts:a written consent shall be obtained from trustee for depositors before their appointment & 3 statement shall appear in circular i) Every co. accepting deposits shall maintain at ts registered office one or more separate registers for deposits accepted or renewed, in which there shall be entered separately in case ofeach depositor following particulars, namely ico shall execute a deposit rust deed in Form DPT-2 atleast 7 days before issuing circular providing tusteeship services shal be appointed asa trustee for depositors, if proposed trustee- a) is director, KMP or any other officer or employee of co. oF ofits holding, Subsidiary or associate co. or a depositor in co; bis indebted to Co, or its subsidiary or its holding or associat co. ra subsidiary of such holding co; le) has material pecuniary relationship with co.; 4) has entered into any guarantee arrangement in respect of principal debts secured by deposits or interest thereon fi)No person indudingaco.thatwinbusinessof |] fayname, address and PAN of depositors; mandate & instructions for payment of interest & for non- [seduction of tax at source, i any i) date or dates on which payment ot interest shall be made; lb) particulars of guardian, incase of le particulars of nominee: a) deposit receipt number; Je} date & amountof each deposit; | k}etats ot deposit insorance— [n duration of deposit & date on which_|linchuding extent of deposit leach deposit is repayable; fnsorance- le) rate of interest or such deposits tobe |) particulars of security or charge payable to depositor; created for repayment of deposits h) due date for payment of interest; Rule 14- Register of Deposits a nn Every co. t0 which these rules apply, shall on or before 30h day of une of every yer, ile with egistrar, a return in Form DPT-3 along with fe as provided in Companies (Registration Offices & Fees) Rules, 2018 & furnish information contained therein as on 31st day of March ofthat year duly audited by auditor of Co fiventris specified in sub-rule (a) shall be made within 7 days rom date of issuance of receipt duly authenticated by a director or secretary of company or by anyother officer authorised by Board for this purpose JP) No wustee for depositors shall be removed from office ater issue of circular or advertisement & before expiry of his term except with consent ofall directors resent at a meeting of boar. ip register referred toi subrule (1) shal be preserved in good order Tora period of not less than 8 years fom financial year in whch atest entry is made in register. ese ee say fh Every co, other than a private co, shall disclose in financial statement, about money received from dicector 2 very private co shal disclose in financial statement about money received from directors, or relatives of directors 3) Every Co. ether than Government Co. shal fle onetime return of outstanding receipt of money or loan by Ca. but not considered as deposits, in terms of clause (cf subrule 1 of rule 2 from 01st Jao 2014 to 31st Morch 2039, as specified in orm DPT-3 within 90 days from 31st March, 2019 along with fe as provided in Companies tion Offices and Fees) Rules 2014 [every co, shall pay a penal rate of interest of 18% p.2. for overdue period in case of deposits, lwhether secured or unsecured, matured & claimed but remaining unpaid. Sead peer ee Pursuant to provisions ot sub-sec (2) of sec 76 lot Act, provision of |sections 73 & 74 shal, mutatis mutandis, apo te acceptance of deposits from publi by etiibe co's aan aoACCEPTANCE OF DEPOSITS BY COMPANIES (Chart 5.5) Repayment of Deposits, Etc, Leet this Act (Section 74) Menor echt Ls by” Certain Companies (Section 75) i) a public co., having such net worth of not less than) 1100 cr. Rs. or turnover of not less than 500 cr. Rs., Imay accept deposits from persons i) provisions of this Chapter shall, mutatis mutandis, lapply to the acceptance of deposits from public junder this section. a) file, within a period of 3 months from such commencement or from date on which such payments, are due, with Registrar a statement| of all deposits accepted by co. & sums remaining unpaid on such amt with interest payable thereon along with arrangements Imade for such repayment lb) repay within 1 year from such lcommencement or from date on which such payments are due, whichever is earlier. i) co, shall, in addition to payment of amt of deposit lor part thereof & interest due, be punishable with fine which shall not be less than 1 Cr. Rs. but which Imay extend to 10 Cr. Rs.; & ii) Tribunal may on an application made by co., after considering financial condition of co., amt of deposit or part thereof & interest payable thereon & such other matters, allow further time as considered reasonable to Co. to repay deposit ii) every officer in default shall be punishable with imprisonment which may extend to 7 years or with fine which shall not be less than 25 lakh Rs. but which may extend to 2 crore Rs., or with both ii) Ifa co. falls to repay deposit:- co. shall, in addition to payment of amt of deposit or part thereof & interest due, be punishable with fine - 1 Cr Rs. to 10 Cr. Rs. & every officer shall be punishable with imprisonment which may extend to 7 yrs or |with fine 25 Lakh Rs. to 2 Cr. Rs., or with both.1) It shall be duty of Co. creating charge within/outside India, on its Joroperty or assets or any of ts undertakings, whether tangible or otherwise, & situated in/outside Indo, to register particulars of charge signed by Co, & charge-holder together with instruments, if any, creating such charge in such form, on payment of such fees &in Jorescribed manner, with Registrar within 30 days of ts creotion: Provided that Registrar may, on application by Co, allow such |repistration tobe made a) in case of charges created before the commencement of companies (Amendment) Act, 2013, within period of 300 days of such creation; or (in case of charges created on or after commencement of |Companies (Amendment) Act, 2018, within period of20 days of such creation, on payment of such addtional fees os may be prescribed: Provided further that f reg. is not made within period specified (cin clouse (a) to fist proviso, registration of charge shall be made within 6 months from date of commencement of Companies (Amendment) Act, 2019, on payment of such additonal fees as may be prescribed & afferent fees may be prescribed for diferent classes, of companies; (o)in clause (b) to fist proviso, Registrar may, on an application, allow such registration to be made within further period of60 days after payment of uch advalorem fees as may be prescribed. Provided aso that any subsequent registration of charge shall not prejudice any right acquired in respect of any property before charge is actully registered, Provided also that this section shal not apply to such charges as may be prescribed in consultation with RBI 12) Where charge is registered with the Registrar under sub-section (1), he shall issue certificate of reistration of uch charge in such form & in such |manner as may be prescribed to Co, &, as case may be, to person in whose fovour charge i created 13) No charge created by Co, shal be token into loccount by the liquidator opponted under this Act Jor 8C 2016, as case may be, or anyother creditor unless it is duly registred under sub-section (1) & certificate of registration of charges given by Registrar under sub-section (2) |4) Nothing in sub-section (3) shall prejudice contract or obigation for repayment of money secured by charge + For purposes of tt proviso & clouse b) of 2nd proviso to section 773), Registrar may, on being satisfied that Co. had sufficient cuse for not filing particulars & instrument of charge, if any, within 30 days of date of creation of charge including modification thereto, allow registration of same after 30 days but within period specified in said lorovisos, on payment of fe, addtional fee or ladvalorem fee, os may be applicable Rules + Application under subrule (1 shall be made in Form No.CHG:1 & Form No.CHG-9 supported by declaration from Co. signed by its CS or director that |such belated fling sholl not adversely affect rights of any other intervening creditors of Co. Ce Cd LL) where co. fails to register charge within period 30 days, person in whose favour charge is created may apply for charge, & Registrar may, on application, within period of 14 days after giving notice to co, unless co. itself registers charge or shows sufficient cause why such charge should nat be esistered, allow such registration on Icincludes variation of terms of Jreement including variation of rate of interest which may be by mutual agreement or by operation oftaw. Evenifrights of charge holder are assigned to 3rd party, it willbe regarded as modification fa) where charge is modified by varying any terms & conditions of existing charge by agreement; lb) where modification isin pursuance ofan agreement for enhancing or decreasing limits; lc) where modification iby ceding 2 par passu charge; 4) change in rate of interest le} change in repayment schedule of loan | partial release of charge ona particular asset or property. extent or operation JofanychargeREGISTRATION OF CHARGE (Chart 6.2) Date of Notice of (erie ttre toy) 80) where any charge on any |property or assets of a co. or any of its undertakings is registered under sec 77, any person acquiring such prop- lerty, assets, undertakings or part thereof or any share or interest therein shall be deemed to have notice of Icharge from date of such registration. i) Co. to intimate registrar on satisfaction of charge : fa co. shall give intimation to Registrar in prescribed form [Form CHG 1], of payment lor satisfaction in full of any charge registered under this Chapter within a period of 30 days from date of such payment or satisfaction ii) Notice to holder of charge by registrar : Registrar shall, on receipt of intimation, cause a notice to be sent to holder of charge calling upon him to show cause within such time not lexceeding 14 days Provided that the Registrar may, on an application by the company or the charge holder, allow such intimation of payment lor satisfaction to be made within a period lof three hundred days of such payment or satisfaction on payment of such additional ees as may be prescribed iii) if any cause is shown, Registrar shall record a note to that effect in the register of charges & shall inform co. iv) No effect of this section on powers lof Registrar :REGISTRATION OF CHARGE (Chart 6.3) | ry Punishment for | Rectification by Central Government in Register of Charges ey (Section 87) Sasa M [CS on being satisfied that — Power of Registrar to Make Entries of Satisfaction & Release in Absence of Intimation from Company (Section 83) [co. shall be Jpunishable with fine which shall not lbe less than 1 lakh Rs. but which may Jextend to 10 lakh Rs. & every officer lof co. who isin default shall be punishable with imprisonment for term which may lextend to 6 months I) any person obtains an order for fp Registrar may, on evidence being given |] [appointment of a receiver of, or ofa to hissatisfaction with espect to any | [person to manage, property, subject |registered charge,- |to a charge, of a co. or if any person appoints such receiver or person Ja) that debt for which charge was given | Junder any power contained in any has been paid or satisfied in whole orin | linstrument, he shall, within a period part; or Jof 30 days from date of passing of Jorder or of making of appointment, |give notice of such appointment to co. & Registrar along witha copy of order or instrument & Registrar shall, on |payment of prescribed fees, register particular of receiver, person or i) Registrar shall inform the affected | linstrumentn register of charges. parties within 30 days of making entry in resister of charges a) omission to give intimation to Registrar of payment or satisfaction of charge, within time required under this Chapter; or [b) omission or misstatement of any particulars, in any fling previously Jmade to Registrar with respect to any such charge or modification thereof Jor with respect to any memorandum of satisfaction or other entry made in Jpursuance of section 82 or section 83, Iwas accidental or due to inadvertence or some other sufficient cause orit lis not of nature to prejudice position of creditors or shareholders of the |company, it may, on application of company or any person interested and lon such terms & conditions os it deems just & expedient, direct that time jing of intimation of payment or satisfaction shal be extended or as |case may require, that omission or misstatement shall be rectified Jb) that par of property or undertaking |charged has been released from charge or has ceased to form part of co's property or undertaking, 1c& may on application filed in Form No. CHG-8 in accordance with section 37. (a) alrect rectification of omission or misstatement of any particulars, in lany filing, previously recorded with Registrar with respect to any charge lor modification thereof, or with respect to any memorandum of satisfaction or other entry made in pursuance of section 82 or section 83, (o) direct extension of time for satisfaction of chorge, if such filing isnot made within 300 days from date of such payment or satisfaction i) Any person appointed above shall, Jon ceasing to hold such appointment, give to co. & Registrar anotice to that effect & Registrar shall register such notice.Management & Administration (Chart 7.1) _ e etecivety exptured & ls) Wolaing of nen clas of equity &preterence Jupdstedin relevant Jenares ty each member resingn/ ose linia ta be shown sopartely reste of shale - nes be done wthin 7 day of ant of approval by Boer or Commitee by Sh egier be matin [ct outonsing oping ot reste t anyother pace whim cy, town village nthicn aaa ace ected ever ter Hoe bo nian wen more tan /300" oot Ena cade ingen of a} orer pase by author atnching meen f2) ule 6: Jeting to cirends @ hypctecationw pages |Maintenance of nex 5) ale 3-every company tinted by shares shat os from aate of regain, maintain regater ot [3) Company shall make Js} imcave ot company no ited ny shares, |rmdex simultaneously ame at member nares, ema aderess; PAN/ anata f any curt Jenc natonaty cae mere i minor ~name|imsuch Regier Joricguarian& date o bith af member name Jresarato sending of notices ete Jaentures/ other security oy vite arte J company shal, within 30 ays rom date of Jovenine of ory orien reester ie with OC :yin event ot any change in stuation of ofce/ a foreten reper be dered jssen& copies thereof maybe reeured le'aaverteement teore closing rgeer be Jee wherein foreign register kept Jn wtorein reester's opt by Co. outside naa ere co. sha Jvery entry in tovign eit within 1 days oer pureocer ofthis Act be deemed to prt of princi eiter Shares! debentres othe sear registered in Jany omer seer ropsteredn foreign ester [nah be cstmeushed irom share debentures! ther security registered in pincpalvagiter & in Jvery otha foregnreqiter ne transaction wth Jc may aecantimve ening of any foreign toner foreign ester kept by company outie nc rt principal rexister Ferber net heang Revel interest in [2'any chances in bene itera ako ee Caan eterna pesca sis phmagiters may oe cloved tor ered nat_| abe [exceeding 20 days any onetime tor | lorie ace ls Reczer's loved with ging ase | ley mater sprite companies re aarnped rom once in tne anguage a Eman avng wiae creation in lace whoreManagement & Administration (Chart 7.2) Section 90 - Investigation of beneficial ownership of shares in certain cases very who acing aloe or tozeter orthrough an or mre persons or ns ining trust & persons resident ose di, lene interest, of ot ess than 25% ouch other pecertage a may be pescibe, in shares of company or riht terre oral exercising of stint iniuence or contro as defined in clause (27) of ston 2 over company herenrefered to as | seificam bene owner shall make a earn to company, speciing nature of hisnerest & other parla in sch manner [within such perio custo of bene interest orgs & an change there, 2s may beprescited Provided thatthe CG may prescbe a cas or [sss of persons who sal not be requied to make declaration unde this sub-section, ners decd by indiuls under ub lection) & changes then wih shal nude ame onda is date of bith, res, etal of ownestipinconpany | fa) Every ompany stall maintain register of a The register maintained under sb-e 2 sal be open to lnspctn by any member of company on payment of such es as maybe prescibed s) The information required by notice under su scion shal be gen by concerned person within a period not exceeding 30 days of ate of fe) Every osha ie a return of sigcant benefial owners of te omgany and changes therein with the egtrarcontaining ames, adresses and ater details asmay be pescied within such time, n such form & manne as may be prescribed. [4 Ee co. hl take necessary testo ie annul whos asignfiant benef ownein ration co. require hin to comply with rvs of this section, 5)Acompany salve oti, n prescribed mane, toany person whether or nota member fhe company whom the co knows orhas reasonable cause to bleve- tobe sina beneficial owner ofc b tobe having knowledge of ident of siitcant beneficial owner or nother person keto Rave such knowledge or el to ave been sgifiat bene owner of company tay ime drng 3 yas immediately preceding date on hich ote issued, & who sot regstred asa signitcant benef owner with he company seqred under thi secton Usuchother presenbed details | [The company stall — a) where that person alto give company if, tecuired by note within tie specified thee lor lb where infomation given snot satiety, spl to Tribunal within a period of 15 days of ery of period specie in ote, foran oder ect that shares in question be subject to restrictions with regard to transfer of interest, suspension ofall ight attached to shares. such other mater as maybe prescribed [von any application made unde sbse( Tova may, afer ign opatity ot being ear topares concerned, mae such order resin rights atachd wth stares within apr of 0dyscfeciptot pation such other pers maybe prescribe fa) The company o person aggrieved by order of riunal may make an application to Tiural for retaraton or ting of estictions| Paced unde sub-section) within period ot year tom date of such onder: Provided thatifn such appation as ben led within a peri of one yar fom the [at of the order under sub-section such shares shale transfered tothe authrty koosttuted under subsection (5) of section 25, in such manners maybe prescited (9A) The CG may make rules for the purposes loth section i company required to aitinreiterurder subsection 2) file information under sub- section, or required to take Jrecesany teps under subsection 4s as todo soo denies inspection as provided there, company & ever ofcerindetat salle punishable with ne hich sal no es thn 10 rupees but |wtch may extend to SO pees & |wbee area contig ne, wth further ne which nay etend fo 1000 apes for very day ater fist uring which fare conus. fititan pean fas to make a ecaraon bsreqired under sibsecon t,he shalbe piste with npsoumet fr aterm |wich may extent oe ya orth fine [ich sta ntbe shan neath pees bt wich may een tote iakhupees or lath both and where th ire a coring oe, witha futher fe which may lend one tesa nese dey ater thei uring ih the ite continues. i) any person wifi fishes any false or incor infomaton or supresses any mateal information at which hes awareindecarton |made under this section he stall be fable to action unde secin 47ts members & debenture holes along wth anges the ince ose of previous iran eis romotes rectors, KMP alongwith changes therein since dose of previous franc yer; le) metngs of members rcs thereot,oard is various nay be prescribed; respect of shareshld by oro behalf of Foregn [athough herein specie provision inate proper compliance preserved for period este of fing of annal tum ‘Pen company fst files anual return under, before expr of period speced here, such os every ofcer who isin defou shal be ble to penalty of. 5000-8 in cos of continuing foe, with fu ena of fs. 100 foreach do uring which such fare contoes, subject t maximum of 50, 00/- Section 94 - ace of keeping & inspection of COU CTS caer ‘members etc. & annual return naa be ep at apace other registered fe, whee more than sth of total members res; pprved by Speci Reslaton Jsyment of fees as maybe spctiedin lomany, but whch may not exceed, 50 reasons Jwbich inspection stall be open by Co. 5) Membr, debenture or security hl day of deposit ee" rovied that index or return as may be prescribed s ander ub section (20 section™ 3 bereeia ownercan tact uring any busines without payment of any fe or an not be avlable fr ispeton| copies unde thissub-= ea bel taacies tend ime swans AU nbd Jusmnce CAC Ni a FT orderto propery cal 2) Rule 8- sending of notices trough elecwonic mode has ben tautoly recopizedby Act + Notice maybe sent tough emalas Tet or stachmentto email oF rtifeatin providing electronic ink oF URL for zcessng such notice smal shale atresia to person ened to recive such emalas per records of company at provided by depository [Meeting hei at shorter nate 1) Gamay be called afer sing sorter nate than tat specie if consent, in wring ory electronic modes accorded thereto. incase of annual general mecting by nt les han sx of members entitled to vote thereat; & in incase ot anyother general meeting by members ot company— s poking company hs share capital maori numberof members entitle to vote & who represent not ess than 95% of uch part of PSC of company a Jes igh to vet at meeting: 0 ) having, company has no share apt ot ss nan 95% of toa voting power exercisable at that Jrectng 2} Where any member of companys ented o vote [ot on some resolution or reslutions tobe moved at |meetng¬ on thers, those members shall be taken into account fr purpose of this subsection n respect of former resolution o resolutions & notin respectfater 2) Vas nsce must state day datetime & place of lmeetng & sal contain statement of business tobe leansactedin that meting, rms issued on suthorty of BOD under name of authorised ofa, say accidental omsion to ive notice to, o non- receipt of such notice to any member or other person [who sented to such tice for any meeting shall ot inate proceedings of meeting 4) Tis essentially means that omison must not be |eesened or deiberate s Fale to send notice to member unde ball that le wit rot reach im at adress mentionedin reser lot members ideliberate & not aciertal, event betes based on mistaken ingresson sons ison company to prove hat omsion was not detberte i} Where speci busines tobe Wansated at companys peeral meting [ten xplanator Statement should be annexed to nate caing such lerera meeting which mus spect nature of cancer ot interest of ey rector or manager & every KMP & relatives of drector/manager of Jompany 2 such statement shal ao include relevant information & festa may erable members to understand meaning, cope implications of items of business & to tke decon thereon -ondinae basins Sec busnes: |: consideration of franca statement & reports of BOD ators ls Anpinment of, fang of remuneration of audtors le Dedacation of any even a Anpointment of Direcorsin place of thre retng acai, al ther businesses except ones stated above are speci business [At GM, every busines trancacted spec usnest 3) rovsoto section 10212) set ou that where item of special business [abcd isto be transacted at meting relates too fects ay other Jomeny, then extent of shareholding inteesnthat other company of every promoter decor, manger, & of every KMPof frst mentioned company stl ferent of such sharchoiing isnot es than 2% of PSC of that company, shall aso best out n statement [)ncase business refers to document which ito be considered t meeting | ne time & pace where such document canbe inspected shuld abo be specied in explanatory statement s)ncae of non scsure or nsucent sclosure inary statement mace by promoter decor, manager or other KM which suits into any beet tor themselves or ther lates then same profit derived shall veto be compensated by him Ratification of Statutory Autor at every subsequent AGM inlet ppcintment or re-appointment since appointment has ready been made in fst AGM for next years. Therefore, ratification f continuation wit be edinar busines i any deft is made in comping with rovison ofthis section, very |eromoter, erecta, manager or other KMP of on defout be abe to [penaty fs. 52.000/e 5 times emeunto ene ccrung to promote, [arectr, manage or ether KP or ony of hi relates, whichever is igher [ones aces of campary prow er larger number quorum for mesting shall be afoows pubic compan i numberof membersis not moe than 00, quorum sal eS members oersoraly present bt umber of membersis not more than oo, bt up o S00, then quorum sabe 25 members personaly resent [tf umber of members exceeds 5000, Jen quorum salle 30 members personaly present Pate Company Jauerum- 2 members personaly present owed Meeting dato want of lavorum- sf reqted quorum isnt present wth hat hou, meeting shall tnd adjourned fornext weak at same time & place or luc other time & place as decided by jasrdot Oectrs fo) case meeting was cle by requstonstu/s 100 Act, then same stat sand canes en case of ajoures meeting or change ot ay tme or ace of meeting u/s 032, company shal ot es than 3 ay notice to members either inviually or by pulshing advertsement in newspaper Jwhere quorum nat resent in adjourned eeting also within haf hour, hen members present shal fom quorum Ones aes oo etarwe orvie, members, personally present, sat eect among themsehestobe [chairman by show of ange 12) pots demanded on election of |carman, Cran ected by show of lands hl contin to be harman ot necting unt some ther persons [ected a Chairman a resutof pl [5 chaeman of meeting one who Jmarages meetings na lenses thar recuiea decorum of nesting: maintained al umes meetings concaed post that, lsectes mines of mesting [cham as pina ace author [sec al questions which reat |meeting & which requ econ at fie. n order to tl he ty rope Ine mus observe strict impart, leven though he stb personally strong opposed to any mater 5) chairman as casting vote in Board Meetings & general meetings, if \speofealy empowered yates of lcompany [esting vote meensthatin event of louaty of ete on porto business bcing transacted at meeting, Chirman af meeting shal have right cart, [second vot) there sno provision in aries for [sting vote, xinary eslton on wich heres equality of votes i |desmes tobe eropped