A Student Handbook on Company Law and Practice
Subject(s): Commerce
ISBN 9788195269037
 Published Date
  Pages 674

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This book Handbook of Company Law & Practice incorporates all the key provisions of Companies Act 2013. It is designed as a text book for students of professional courses and other allied business courses. Includes new concepts such as One Person Company, Small Company, Dormant Company, Associate Company, Key Managerial Personnel, Global Depository Receipts, Registered Valuers, Vigil Mechanism, CSR, rotation of auditors, Secretarial Audit, Secretarial Standards for increased accountability and greater corporate management. Elobrates on topics such as Role of National Company Law Tribunal – Its functions and Powers, the power of Secretarial Standards, Role of the Serious Fraud Investigation officer in Investing Serious Fraud.

Cover
Highlights of the Companies Act, 2013
The Companies (Amendment) Act, 2015 - Key Amendments
Title Page
Copyright Page
Contents at a Glance
Contents
Foreword
Preface
1. Nature of Company
Meaning of a Company
Definition of a Company
Characteristic Features of the Company
Corporation or Body Corporate
Lifting or Piercing the Corporate Veil
Exceptions Under Judicial Interpretation
Exceptions Under Statutory Provisions
Illegal Associations [Section 464]
Consequences
Association not for Profit or Licensed Companies [Section 8]
Difference Between LLP and Partnership Firm
Distinction Between a Partnership and a Company
Review Questions
2. Classification of Companies
Introduction
Basis of Classification of Companies
Classification of Companies
Chartered Companies
Statutory Companies
Registered Companies
Classification on the Basis of Number of Members
Private Company
Public Company - [Section 2 (71)]
Distinction between a Public Company and a Private Company
Classification on The Basis of Liability
Limited Liability
Companies Limited by Guarantee [Section 2(21)]
Companies Limited by Shares [Section 2(22)]
Unlimited Company - [Section 2(92)]
Classification on The Basis of Ownership
1. Government Company - [Section 2(45)]
2. Non-Government Company
Producer Companies
Objects of a Producer Company
Review Questions
3. Formation and Incorporation of Company
Introduction
Company Promotion
Company Formation (Stages)
Promoter - Definition
Duties of Promoters
Incorporation of Companies
Step for Formation of Company
Corporate Identity Number (CIN)
Conversion By OPC To Public or Private Company
Conversion of Private Company Into One Person Company
Review Questions
4. Memorandum of Association
Introduction
Purpose of Memorandum
Forms of Memorandum
Contents of Memorandum - [Section 4(1)]
The Registered Office Clause [Sec.4(1)(b)]
Objects Clause [Section. 4(1)(c)]
Liability Clause [Section. 4(1)d]
Capital Clause [Section. 4(1)(e)]
Declaration for Subscription
Alteration of Memorandum of Association
Shifting of Registered Office within the same State. (Rule 28)
Alteration of Memorandum by Change of Name (Rule 29)
Rectification of Name of the Company
Doctrine of Ultra Vires
Review Questions
5. Articles of Association
Meaning of Articles
Contents of Articles
Alteration of Articles
Alteration of Articles to be Filed With Registrar
Relationship between Articles and Memorandum
Doctrine of Constructive Notice
Doctrine of Indoor Management
Review Questions
6. Prospectus
Introduction
Methods/Sources of Raising Share Capital
Kinds of Share Capital
Public Offer
Issue of Securities by a Public Company
Issue of Securities by a Private Company
Offer of Sale by Members
Information Memorandum
Misleading Prospectus
Liabilities in Case of Mis-Statements
Civil Liability
Allotment of Securities by Company [Section 39]
Return of Allotment with Other Document
Return of Allotment - At a Glance
Issue of Securities by a Private Company
Review Questions
7. Share Capital and Debentures
Share Capital
Kinds of Shares
Nature of Shares or Debentures [Section 44]
Numbering of Shares [Section 45]
Share Certificate [Section 46]
Companies (Share Capital And Debentures) Rules, 2014
Issue of Duplicate Share Certificate
Voting Rights
Sweat Equity Shares
Transfer and Transmission of Securities [Section 56]
Delivery of Certificates of Securities
Procedure for Issue of Shares on Rights Basis
Procedure For Reduction of Share Capital - At a Glance
Debt Capital
Debenture
Debenture - Main Features
Definition of Debenture [Section 2(30)]
Kinds of debentures
Distinction between Shareholder and Debenture Holder
Issue of Debentures under the Companies Act, 2013
Nomination by Securities Holders [Section 72(1)]
Review Questions
8. Membership
Definition of Member
Members and Shareholders
Distinction between Shareholder and Member
Who can be a Member of a Company?
Joint Holding of Shares
Acquisition of Membership
Termination of Membership
Expulsion of Member
Rights of Members
The Statutory Rights
Annual Return [Section 92 Read With Rule 11]
Form and Contents of Annual Return
Further Provisions Regarding Annual Return
Return to be Filed with Registrar in Case Promoters’ Stake Changes
Review Questions
9. Borrowing Powers and Charges
Loans and Investments
Introduction
Ultra Vires Borrowing
Borrowing which is Ultra-Vires the Company
Loans to Directors [Section 185]
Loan and Investment by the Company [Section 186]
Prior Approval of Public Financial Institutions
Investment of Company to be Held in its Own Name
Register of Investments
Charges
Definition of Charge
Crystallization of a Floating Charge
Application for Registration of Charge
Registration of Creation or Modification of Charges as per Companies (Registration of Charges) Rules, 2014
Company to Report Satisfaction of Charges
Power of Registrar in Correction with Satisfaction of Charges
Intimation of Appointment of Receiver or Manager
Company’s Register of Charges
Punishment for Non Filing of Charges
Rectification by Central Government in Registration of Charges
Review Questions
10. Acceptance of Deposits by Companies
Provision Relating to Acceptance of Deposits – Non-Applicability
Applicability
Eligible Company
Deposit [Section 2(31)]
Conditions for Accepting Deposits
Terms and Conditions
Circulars/Advertisement [Section 73(2)] Read with Rule 4 of Companies (Acceptance of Deposits) Rules, 2014
Deposit Insurance
Security
Appointment of Trustees
Trust Deed
Description of Deposit Scheme
Details of Charge Created
Details of Deposit Insurance
Reporting Requirements
Events of Defaults
Miscellaneous
Duties of Trustees
Review Questions
11. Corporate Governance
Corporate Governance
Principles of Corporate Governance
Objectives of Corporate Governance
Corporate Governance Needs
The Role of Ownership Structures and Group Affiliation
The Corporate Governance of Banks
The Role of Institutional Investors
State-Owned Firms
Family-Owned Firms
Listing Agreement - Features
CEO/CFO Certification
Report on Corporate Governance
Compliance
Governance Manual
The Business Planning Process
Establish Team
Determine Overall Goals and Stakeholders
Carry out Research
Undertake Financial Analysis
Establish and Monitor Business Plan
Role of Auditors in Corporate Governance
Requirements to Strengthen Corporate Governance
Review Questions
12. Dividend
Dividend
Dividend and Interest
Declaration of Dividend
Source of Dividend
Depreciation
Articles of Association
Types of Dividend
Dividend Warrant
Transfer to Investor Education and Protection Fund [IEPF]
Creation of Investor Education and Protection Fund
Source of IEPF
Utilization of Fund
Authority for the Fund
Claim From the Fund
Bonus Shares or Capitalization of Profits
Meaning of Bonus Shares
Source for Issue of Bonus Shares
Power of Board of Directors
Capitalizing Reserves
Bonus Share not in Lieu of Dividend
Guidelines Issued by SEBI for Issue of Bonus Shares
Review Questions
13. Company Directors & Related Party Transactions
Director
Kinds of Directors
Class of Directors
Creation and Maintenance of Data Bank Under Companies (Appointment & Qualification of Directors) Rules, 2014
Independent Directory Portal
Small Share Holders’ Director
Director Identification Number
Allotment of DIN Under Companies (Appointment & Qualification of Directors) Rules, 2014
Appointment of Directors
Duties of Directors
Liabilities of Directors
Fraudulent Trading
Retirement of Directors by Rotation
Number of Directorships
Duties of Directors [Section 166]
Vacation of Office of Director [Section 167]
Resignation of a Director [Section 168]
Removal of a Director [Section 169]
Procedure for Removal of a Director
Appointment of Another Director in Place of Removed Director
Register of Directors and key Managerial Personnel and their Shareholdership [Rule 17 of Companies (Appointment & Qualification of Directors) Rules, 2014]
Constitution of Important Committees
Audit Committee [Section 177]
Functions of Audit Committee
Powers of Audit Committee
Rights of Auditors
Disclosure in Board’s Report
Vigil Mechanism
Nomination and Remuneration Committee [Section 178]
Functions
Stakeholders Relationship Committee
Contravention
Powers of Board under Companies (Meeting of Board and its Powers) Rules, 2014
Power to Contribute to Charitable Funds etc.,
Delegation of Power
Restrictions on Powers of the Board [Section 180]
Prohibition and Restrictions on Political Contributions [Section182]
Disclosure of Interest by Director [Section 184]
Loans to Directors [Section 185]
Loan and Investment by the Company [Section 186]
Special Resolution
Prior approval of Public Financial Institutions
Register of Loan
Register of Investments
Register of Contracts or Arrangements in which Directors are Interested [Section 189]
Penalty
Contract by One Person Company
Prohibition of Forward Dealings in Securities of Companies by director
Prohibition on Insider Trading of Securities [Section 195]
Chapter 13 B Related Party Transactions
Definition of ‘Related Party’
Definition of ‘Relative’
Related Party Transactions [Section 188]
Definition of ‘Office or Place of Profit’
Definition of ‘Arm’s Length Transaction’
Related Party Transactions (For The Company As A Whole)
Review Questions
14. Appointment and Remuneration of Managerial Personnel
Appointment of Managerial Personnel
Conditions for Appointment
Managerial Remuneration
Calculation of Net Profit [Section 198]
Schedule V Requirements
Remuneration Payable in Certain Special Circumstances
Perquisites not Included in Managerial Remuneration
Disclosure in Board’s Report [Section 197(12) Read with Rules 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014]
Statement About Every Employee of the Company
Compensation for Loss of Office of Managing Director [Section 202]
Appointment of Key Managerial Personnel
Secretarial Audit
Functions of the Company Secretary [Section 205]
Review Questions
15. Company Meetings
Introduction
Definition
Essentials of a Valid Meeting
Proper Authority to Convene a Meeting
Rules Regarding Quorum in General Meeting
Agenda
Proper Chairmanship
Powers and Duties of Chairman
Classification of Meetings
Annual General Meeting [AGM] [Section 96]
Purpose of AGM
Business Transacted at AGM
Quorum for General Meetings [Section 103]
Special Provisions for OPC [Section 122]
Extra Ordinary General Meeting [EGM] [Section 100]
Board Meeting [Section 173]
Meetings of Directors
Quorum for meetings of Board [Section 174]
Minutes
Passing of Resolution by Circulation [Section 175]
Defects in Appointment of Directors not to Invalidate Action Taken [Section 176]
Class Meetings
Resolutions
Meaning
Kinds of Resolutions [Section 114]
Reports
Distinction between Minutes and Reports
Review Questions
16. Accounts of Companies
Keeping of Books of Accounts [Section 128]
Financial Statement
Manner of Consolidation of Accounts under Companies (Accounts) Rules, 2014
Board’s Report
Filing of Financial Statements
Right of Members
Internal Audit Under Companies (Accounts) Rules, 2014
National Financial Reporting Authority (Section 132)
Constitution
Duties of NFRA
Powers of NFRA
Corporate Social Responsibility [Section 135]
Activities in Schedule VII
CSR Policy
Net Profit
CSR Committee
CSR Expenditure
CSR Reporting
Review Questions
17. Audit and Auditors
Appointment Of Auditors [Section 139]
Procedure for Selection and Appointment of Auditors Under Companies (Audit and Auditors) Rules, 2014
Qualifications of Auditor [Section 141]
Disqualifications of Auditor
Written Consent and Certificate of Auditor
Notice to Registrar
Tenure of Auditors
Obligation for Existing Company
Rotation of Auditors
Re-Appointment of Retiring Auditor
Changing of Auditor
Removal of an Auditor [Section 140]
Resignation of Auditor
Liability of Auditor
Remuneration of Auditors [Section 142]
Powers of Auditors [Section 143]
Duties of the Auditor
Auditor’s Report
Branch Audit
Reporting of Frauds by Auditor [Section 143(14) Read with Rule 13]
Restrictions on Auditor [Section 144]
Accounting Standards
Review Questions
18. Inspection, Inquiry and Investigation
Powers of Registrar
Obligation of the Company
Subsequent Notice
Conduct of Inspection and Inquiry
Powers of Inspector or Registrar
Security [Section 214 Read with Rule 5 of Companies. (Inspection, Investigation & Inquiry) Rules, 2014]
Procedure, Powers etc., of Inspectors
Power of Inspector to Investigate any Other Body Corporate
Power to Seize the Document
Restrictions on Securities
Inspector’s Report
Action on Report
Serious Fraud Investigation Office (SFIO) [Section 211]
Composition of SFIO
Investigation by SFIO
Review Questions
19. Compromise, Arrangement and Amalgamation
Arrangement
Disclosures in the Application
Order of Tribunal for Meeting
Notice to Meeting
Merger and Amalgamation of Companies
Application to Tribunal
Sanction by the Tribunal
Mergers and Amalgamations of Certain Companies
Merger or Amalgamation of Company with Foreign Company
Acquiring the Shares of Dissenting Shareholders
Purchase of Minority Shareholding
Power of Central Government to Provide for Amalgamation
Review Questions
20. Prevention of Oppression and Mismanagement
Application to Tribunal
Powers of Tribunal
Order of the Tribunal
Alteration to Memorandum or Articles
Registration of Alteration
Termination or Modification of Certain Agreements
Consideration by the
Tribunal Frivolous and Vexatious Application
Review Questions
21. Winding Up of Companies
Modes of Winding Up of Companies
Part I – Winding Up By The Tribunal
Unable to Pay Debts
Powers of Tribunal
Appointment of Provisional Liquidator
Directions for Filing Statements
Company Liquidator
Declaration by Liquidator
Removal and Replacement of Liquidator
Winding up Committee
Jurisdiction of the Tribunal (Section 280)
Settlement of List of Contributories and Application of Assets
Advisory Committee [Section 287]
Power of Tribunal
Powers and Duties of Company Liquidator [Section 290]
Exercise and Control of Company Liquidator’s Powers
Keeping of Books [Section 293]
Audit of Accounts [Section 294]
Payment of Debts and Set off [Section 295]
Powers of Tribunal [Section 296-301]
Dissolution of Company [Section 302]
Part II - Voluntary Winding Up
Conditions for Voluntary Winding Up
Creditors’ Meeting
Publication of Resolution [Section 307]
Role of Company Liquidator in Voluntary Winding Up
Effect on Appoint of Company Liquidator [Section 313]
Removal of Company Liquidator [Section 311]
Duties of Company Liquidator [Section 314]
Committee to assist Company Liquidator
Final Meeting for Dissolution [Section 318]
Powers of Company Liquidator [Section 319]
Power to Accept Shares as Consideration for Sale of Property
Power to Distribute Property of Company
Part III - Provisions Relating to Every Mode of Winding Up
Insolvency Rules in Winding Up of Insolvent Companies
Workmen
Overriding Preferential Payments [Section 326]
Preferential Payments [Section 327]
Disclaimer of Onerous Property
Vesting Order
Transactions After the Commencement of Winding Up
Penal provisions [Section 336]
Offences by Officers of Companies in Liquidation
Fraud by Officers [Section 337]
Non Keeping Proper Accounts [Section 338]
Fraudulent Conduct of Business [Section 339]
Power of Tribunal to Assess Damages [Section 340]
Prosecution of Delinquent Officers and Members
Power of Company Liquidator [Section 343]
Disposal of Books and Papers [Section 347]
Statement as to Pending Liquidation
Depositing Money
Company Liquidation Dividend and Undistributed Assets Account
Meeting of Creditors or Contributories [Section 354]
Dissolution of the Company to be Void
Exclusion of Certain time in Computing Period of Limitation
Part IV - Official Liquidator
Official Liquidator
Appointment of Official Liquidator [Section 359]
Powers and Functions [Section 360]
Procedure for Liquidation [Section 361 to 365]
Review Questions
22. New Concepts in Companies Act, 2013
Secretarial Audit
CSR Under The Companies Act, 2013
Clause 49 Of Listing Agreement
E-Board Meetings Board Through Electronic Mode
Concept Of Whistle Blowing
Secretarial Standards
Nidhi Companies
Company Secretary
Cost Audit Under Companies Act, 2013
Serious Fraud Investigation Office
Dormant Company
E Governance
Mca 21 (E-Governance)
XBRL
E-Voting
Legal Framework Under The Companies Act 2013
Registered Valuers
Class Action
National Financial Reporting Authority (NFRA)
Schedules I - VII Of Companies Act, 2013
Schedule II
Schedule III
Part I — Balance Sheet
I. Equity and Liabilities
II. Assets
Part II – Statement Of Profit and Loss
Schedule IV
Schedule V
Schedule VI
Schedule VII
New Company Law Rules, 2014
New Forms Prescribed Under Companies Rules, 2014
Model Questions Papers
Company Law Quiz
Annexure
Index

Dr. V. Balachandran is presently working as Registrar - in - charge of Alagappa University, Karaikudi. He is Professor of Corporate Secretaryship and Dean (SA) and Formerly Director of Distance Education, Alagappa University. He is a Fellow Member of the Institute of Company Secretaries of India, New Delhi. He has over 30 years of P.G. teaching experience and 25 years of Research Experience. He has guided 23 Ph.D. and 55 M.Phil candidates. He has authored/ co - authored 12 books pertaining to Indirect Taxation, Corporate Governance, Ethics and Social Responsibility, Office Management, Legal Aspects of Business, Economic and Other Legislations ( Corporate Laws), Company Secretarial Practice, Business Law, Taxation Law and Practice and Business Taxation. He has published over 300 articles/research papers and has been on editorial board for 10 national and online international journals. He has completed several projects funded by UGC and ICSI. He has received many awards from prestigious institutions for his contributions in the educational arena. He has been a co-ordinator for UGC's Innovative Programme "PGDVAT and Service Tax" from 2012 - 2015.

Dr. M. Govindarajan is now working as Senior Accounts Officer (TR - Comp & Taxation) in BSNL, Madurai. He has more than 36 years of experience in legal, taxation, arbitration, accounts, finance and audit areas. He is an Associate Member of the Institute of Company Secretaries of India and the Institute of Cost Accountants of India.

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