Management
and Administration
Chapter VII of the Companies Act 2013 (Sec 88 – 122) & Draft Rules
And
Companies Act 1956 (Sec 150-197A)
Care has been taken by the lawmakers to bring in the guidelines specified in the Secretarial Standards. This backgrounder is prepared with a view to bring in an insight into the new changes that have been brought to the existing Companies Act 1956.
Particulars
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Applicability
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Major
changes on comparing Companies act 2013 with 1956
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Register of Members
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All
Companies
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Apart from maintenance of register of members and
debenture holders, register and index of other security holders is also to
be maintained
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All companies are required to maintain these registers
irrespective of the number of members/ debenture holders (DH).(Earlier it was required only if the Member
> 50 and DH > 50)
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Power to close register of members or debenture holders
or other security holders
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All Companies
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Closure to be intimated atleast 7 days in
advance and for listed companies , through advertisement in newspapers as
detailed in the Rules in this regard
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Annual Return
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All Companies
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The
following Additional information and new disclosures are required to be
provided
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Changes in promoters, directors, KMP during last year.
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Details of Class meetings,
Members meetings, Board meetings and Committee meetings held during the year
along with their attendance.
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Remuneration details of directors and
KMP
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Appeals made by company,
Penalties or punishments imposed on the Company or Directors or KMP
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Details of Sharesheld by or on behalf of
FII.
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All companies having such paid up capital and turnover
to get the annual return certified by a PCS
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An extract of the Annual report to form part of the
Board’s Report
Persons authorized to
sign the Annual Return (AR):
Unlisted
Company:The
AR shall be signed by One director along with the CS and if there is no CS
then by the PCS.
Listed
Company with prescribed paid up capital and turn over:Shall also be certified
by PCS in practice
One
Person Company and Small Company:shall be signed by CS or where there
is no CS, by Director of the Company.
Failure to certify in conformity with the
requirements of the clause:PCS shall be punishable with fine : Rs 50,000 – Rs.
5,00,000
Preservation
of Annual Return and Copies of their annexure:for
a period of 8 years from the date of filing with the registrar.
Query:
Is it required to file all the particulars of
the members including present and past every year or is it sufficient if we
file only when there is changes in these particulars?
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Return to be filed with registrar in case promoter’s
stake changes
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Listed Companies
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Shall file
a return with the ROC within 15 days from the date of change in the number of
shares held by the promoters and top ten shareholders of the company. (Newly
inserted)
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Place of keeping and inspection of registers, returns
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All Companies
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Registers shall normally be maintained at the
Registered Office, however on passing a Special Resolution the registers maybe maintained at any other place outside the city,
town or village in which the registered office is situated where more than
1/10th of the total members entered in the register of members
reside.
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The register shall be kept open throughout the day
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In addition to the right given to the members and
debenture holders, the security holders and beneficial owners can also,now
inspect the register without paying any fee.
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Annual General Meeting
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All Companies
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The first AGM is to be held within 9 months from the
end of the first financial year (Earlier
it was 18 months from the date of incorporation)
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The AGM is to be held during business hours i.e.,Between
9:00 am to 6:00 pm and it cannot be held on a National Holiday. (Earlier it was public holiday)
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No resolution can be passed in one annual General
meeting to fix the time for its subsequent Annual General Meetings
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Notice of Meeting
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All Companies
Except: OPC
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The notice can be sent through electronic means or physical
means, and it shall be put on the website of the Company or on the website
notified by the Central Government
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The consent for the shorter notice shall be given in
writing or by electronic mode by atleast 95% of the members entitled to vote
at such General meeting. (Earlier
AGM was excluded)
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Statement to be Annexed to Notice
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All Companies
Except: OPC
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If the Special
business that is being transacted relates to or affects any other company
then
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The shareholding information of directors or manager
holding more than 2% of the paid up capital of that other company is to be
disclosed. (Earlier it was 20%)
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If any director or KMP derives any benefit due to the
non-disclosure of any information in the statement then he shall be
·
Liable to compensate the company to the extent of
benefit received by him
·
Punishable with fine upto Rs. 50,000 or 5 times the
amount of benefit accrued. (Earlier
there were no penal provisions)
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Quorum for meetings
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All Companies
Except: OPC
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The quorum is fixed based on the number of members of
the Company: (Members to be personally present to be counted for the quorum)
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In case of any adjourned meeting the company shall give
not less than 3 days’ notice to
the members either Individually or by
Press Announcement. (Newly Inserted)
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Proxies
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All companies Except certain class or classes of
Companies
Except: OPC
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A person shall act as a proxy on behalf of members not
exceeding 50 and holding in aggregate not more than 10% of total share
capital of the Company carrying voting rights. (There was no restriction earlier)
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The Central Govt. may prescribe a class or classes of
companies whose members shall not be entitled to appoint proxies.
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Restriction on voting rights
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Both private and public companies (Earlier it was only to public companies).
Except: OPC
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The company
shall not prohibit members from exercising his voting rights on any grounds
other than non-payment of calls or lien on shares applied.
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Voting Through electronic means
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Prescribed class or classes of companies
Except: OPC
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Now members of the prescribed class or classes of
companies can exercise vote thought electronic means. (through Secured
system)
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The Notice of the meeting should clearly specify that
the company is providing facility for voting by electronic means along with
the process and manner for voting by electronic means.
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The E- voting shall be open for not less than 7 days
and not more than 10 days
Appointment of Scrutinizer:
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The Board shall appoint a scrutinizer to scrutinize the
e-voting process.
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The scrutinizer shall within 3 working days from date
of conclusion of e-voting period unblock the votes in the presence of at
least 2 witnesses and make a report of the votes casted in favour or against,
if any forthwith to the Chairman.
Date of passing such
resolution
Subject to
the receipt of the sufficient votes the resolution shall be said to be passed
on the date of the relevant general meeting of the members.
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Demand for Poll
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All Companies
Except: OPC
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In addition
to the Chairman the following members present in person or through proxy are
also entitled to demand poll:
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Postal Ballot
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All companies
Except: OPC
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Applicable
to all Companies. (Earlier
it was applicable only to Listed Companies)
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Circulation of Members Resolution
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To all companies the exemption that was given to the
Banking companies earlier no more exists.
Except: OPC
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Number of
members entitled to give a request to pass a resolution through circulation:
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Companies
having share capital : members entitled to vote holding shares of ≥ 10% of
paid up share capital
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Companies
not having share capital : Members having voting power of ≥ 10% of the total voting power of all the
members
The CA 2013
permits requisition for circulation of statement at AGMs also.
Currently
the word limit of 1000 words has been removed.
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Ordinary and Special Resolution
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All Companies
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Votes cast
electronically as well as votes cast by postal ballot shall be counted for
determining whether or not ordinary/special resolution has been passed or
not.
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Resolutions requiring special notice
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All Companies
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Request for
passing of such resolution shall be given to the company by such number of
members holdings
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Not less than 1% of the total voting power or holding
shares on which aggregate sum not exceeding Rs, 5,00,000 as may be prescribed
has been paid up.
There is no
mention about time limit in providing the notice. (Earlier
it was 14 clear days before the day of the meeting)
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Resolution and Agreements to be filed
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All Companies
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The
following resolutions and agreements shall be filed with the registrar within
30 days from the date of passing the resolution or execution of the
agreements as the case may be:
a. Special Resolution
b. Board Resolution:
appointment, renewal of appointment, variation in terms of appointment of MD
c. Resolution passed by the
majority of any class of members
d. Resolution passed to
transact business under Sec 179 and 180
i.
Sec 179 - Powers of the Board
ii. Sec 180 - restriction on
powers of the Board).
e. Resolution passed for
voluntary winding up
f.
Any other resolution, agreement as may be prescribed.
Penalties:
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The company : fine of Rs. 5 L - Rs. 25 L
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Every officer in default: Rs. 1 L - Rs. 5 L
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Minutes of proceedings of General Meeting, Meeting of
Board of Directors and other meeting and resolutions passed by postal ballot
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All Companies
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Minutes of the meeting of any class of shareholders and
creditors to be maintained
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Resolutions passed through postal ballot to be
maintained
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Person who is found to be tampering with the minutes of
the proceedings of the meeting shall
be punishable
o
with imprisonment: upto 2 yrs and
o
with fine: Rs. 25,000/- – Rs. 1,00,000/-
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Maintenance and inspection of documents in electronic
form
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All Companies
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This
section enables the companies to maintain, allow inspections or furnish
copies of documents, records, minutes, registers etc. in electronic form.
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Report on Annual General Meeting
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Listed Companies
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A report on
each AGM is to be prepared including the confirmation to the effect that the
meeting was convened, held and conducted as per provisions of the Act and the
rules made there under.
A copy of
the report to be filed with the ROC within 30 days from the date of
conclusion of the AGM
If default in complying:Punishable with fine
Company: Rs. 1,00,000/- to Rs. 5,00,000/-
Every officer who is in default: Rs 25,000/- to Rs.
1,00,000/-
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Applicability of this chapter to one person company
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OPC
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The Provisions of Sec 98 and Section 100 to 111 are not
applicable to OPC. (the
table clearly specifies the exemptions granted to OPC under the applicability
heading)
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The resolutions passed shall be communicated to the
company and entered in the minutes book.
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The date of signing the minutes shall be taken to be
the date of the general meeting/ board meeting.
Query: How will one person communicate to the Company?
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Sanka Indrani, Company Secretary
Achuthan R, Company Secretary
Note: This article is prepared by the authors, as a back grounder for the meeting conducted by Chennai West Study Circle on 15th March 2014
Note: This article is prepared by the authors, as a back grounder for the meeting conducted by Chennai West Study Circle on 15th March 2014
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