COMPANIES ACT, 2013 A P A R A D I G M S H I F T
CONTENTS Chapter
Topic
Chapter-I
Preliminary
Chapter-II
Incorporation
Chapter-III
Prospectus & Allotment
Chapter-IV
Share Capital & Debentures
Chapter-V
Deposits
Chapter-VI
Charges
Chapter-VII
Management & Administration
Chapter-VIII
Dividend
Chapter-IX
Accounts of Companies
Chapter-X
Audit and Auditors
Chapter-XI
Appointment & Remuneration of Directors
CONTENTS Chapter
Topic
Chapter-XII
Meeting of Board and its Powers
Chapter-XIII
Appointment & Remuneration of Managerial Personnel
Chapter-XIV
Inspection, Inquiry and Investigation
Chapter-XV
Compromises, Arrangements and Amalgamation
Chapter-XVI
Prevention of Oppression and Mismanagement
CHAPTER-I-NEW DEFINITIONS
CHAPTER-I-NEW DEFINITIONS Financial Year
• •
Officer & Officer in Default
• • • • •
Private Company
•
Associate Company
•
Charge
•
April 01st to March 31st Incorporation post January 01st then March 31st of following year WTD KMP Specified Director or all directors if not so specified Person under Immediate Authority of Board Every Director actively involved Maximum number of members increased from 50 to 200 significant influence (control of min 20%. of total share capital, or of business decisions under an agreement) and includes a joint venture interest or lien on Property or assets
CHAPTER-I-NEW DEFINITIONS Financial Statement
Additions: Cash Flow Statement Statement on Changes in Equity • •
Key managerial personnel
CEO/MD/Manager CS CFO KMP s are responsible for major decisions enlisted below: - Prohibition on insider trading/forward dealing in securities. - Included in Officer/officer in default/related party along with relatives. - Authority to sign document / proceedings / contract company‟s behalf. - Responsible for disclosures in annual return. - Required to disclose interest/concern & changes to company within 30 days of appointment/ relinquishment. - In case KMP gains undue benefit from disgorgement of company assets, he shall be held personally liable if the same is proved in inspection of company. •
•
•
CHAPTER-I-NEW DEFINITIONS RELATED PARTY Person giving advice, directions or instructions Exc. Prof.
Director or Relative
KMP or Relative
Director/ Relative is partner PVT Co
Company
Public CO
DIR/MGR is DIR or Member
DIR/MGR is Director Or with Relatives Holding > 2%
Firm
Holding / Subsidiary / Associate or Fellow Subsidiary
KMP or Relative of Holding Co
Corporate having shadow Directors
CHAPTER-I-NEW DEFINITIONS RELATIVES Members of HUF
Spouse
Father*/ Mother*
Brother*/ Sister*
Son*/His Wife
Daughter*/ Her Husband
*Includes Step Relations
CHAPTER-I-NEW DEFINITIONS Small Company Other than a Public Company Not Applicable to: -Holding PUC < 50 Lacs
Turnover < 2 Crore
-Subsidiary -Non-Profit Company -Co. governed by special Act
CHAPTER II: INCORPORATION
CHAPTER II: INCORPORATION Main Objects to be classified into: • A) Main objects • B) Incidental Matters
Commencement of Business: Now PVT Co is also required to take COB Boards-Name and RO of Co to be affixed outside every premise in vernacular language Stationary- To mention -name and address, CIN Telephone No., Fax No., E-Mail ID and Website (If any)
CHAPTER II: INCORPORATION ETC Shifting of RO (One State to another): • Time frame for RD- 2 months
Alteration of Article: • Public to Private to be confirmed by Tribunal • Alteration of AOA to be regd. In 15 days
Subsidiary not to hold shares in its holding Service of Documents: • -Electronic Mode has been recognized
CHAPTER II: INCORPORATION ONE PERSON COMPANY Key Features: • One member & one Nominee • Only Indian Citizen Resident in India • Limit- Only One OPC (Member/Nominee) • Incorporation/Conversion not allowed to Section 8 Co/ NBFC • Mandatory Conversion • Paid Up >50Lacs within 6 months of ↑, or • Annual turnover > 2 Crores within 6 months of last day of F.Y. • No Voluntary Conversion before expiry of 2 years of Incorporation • Conversion after meeting minimum requirements for PVT & Public Co • A PVT Co may also get converted into OPC if it meets the Eligibility of Capital & turnover
CHAPTER-III-PROSPECTUS & ALLOTMENT
CHAPTER-III-PROSPECTUS & ALLOTMENT
Class Action for mis-statement in prospectus or fraudulent inducement to invest
A class action, a class suit, or a representative action is
a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a group of defendants is being sued.
CHAPTER-IV- SHARE CAPITAL & DEBENTURES
Prohibition on issue of shares at discount except as Sweat Equity Preference Shares can now be issued for a period exceeding 20 to 30 Years for Infra Projects
CHAPTER-IV- SHARE CAPITAL & DEBENTURES Further issue of share capital
Others Right Issue
ESOP
(Special Resolution)
These provisions are now applicable to conversion of debenture or loan to shares of a Private Limited Company.
CHAPTER-IV- SHARE CAPITAL & DEBENTURES BONUS SHARES
Sources:
Free reserves Securities premium account Capital redemption reserve Not revaluation of F.A.
Conditions:
Authority of AOA Authority of General Meeting No default in F.D. or Debt Securities No default in Statutory dues of employees Decisions once taken can‟t be rolled back
CHAPTER-IV- SHARE CAPITAL & DEBENTURES PREFERENTIAL ALLOTMENT
Definition
Otherwise than Right Issue, ESOP, Bonus Issue, Public Issue, Sweat Equity or Depository Receipts
- Authority of AOA
Procedural Aspects
- Special Resolution - To be Fully paid at the time of allotment - Price Valuation by Registered Valuer - Every detail and justification to be provided to shareholders
CHAPTER-V DEPOSITS
CHAPTER-V DEPOSITS DEEMED DEPOSITS- SHARE APPLICATION
On receipt of Share Application allotment to be made within 60 Days Else refund the amount within 15 days of end of above period. Else the amount shall be treated as Deposit Any adjustment of the amount shall not be treated as refund
CHAPTER-V DEPOSITS DEEMED DEPOSITS- ADVANCE Advances becoming refundable due to reason company accepting money doesn‟t have permission/ approval to deal : Advance against supply of goods for > 365 Days Advance received as consideration for property under a agreement or arrangement Advance under long term project for supply of Capital Goods
CHAPTER-V DEPOSITS DEEMED DEPOSITS- AMOUNT FROM DIRECTOR
Receipt of amount from Director if such Director does not furnish: A declaration in writing to the effect that the amount is not given out of funds acquired by him by borrowing or accepting loans or deposits from others
CHAPTER-VI- REGISTRATION OF CHARGES
CHAPTER-VI- REGISTRATION OF CHARGES
Definition • "charge" means an interest or lien created on the property or assets of a company or any of its undertakings or both as security and includes a mortgage.
Implication • The definition is open ended. List of Charges to be registered dropped. • Therefore every charge/mortgage etc is to be registred
CHAPTER-VI- REGISTRATION OF CHARGES
Charge Registration •Upto 30 days •Upto 300 days- with Additional fee •Beyond 300 days – Application to RD for Extension of Time •If not registered by Company within 30 days the Charge Holder may apply. ROC to give 14 days notice to Company & then Register
CHAPTER VII-MANAGEMENT & ADMINISTRATION
CHAPTER VII-MANAGEMENT & ADMINISTRATION CONTENTS OF ANNUAL RETURN
• Promoters, Directors & KMPs • Business activities contributing 10% or more of T.O • Details of Holding, Subsidiary and Associate • Changes in the Capital Structure • Turnover and Net Worth of the Company • Shareholding of KMP and promoters • Details of Board, committee and Member‟s meetings • Remuneration of Directors & KMPs • Penalties, Punishment, Compounding • List of applicable filling under Companies Act and rules • Annual Return to be signed by Director and CS (if not then by Practicing CS) except OPC & Small Company
CHAPTER VII-MANAGEMENT & ADMINISTRATION RECORDS- SHIFT TO ELECTRONIC MODE
All Registers/records can be maintained in Electronic Form
KMPs responsible to maintain Records
Daily back-up
KMP to ensure the safety and limited access to records
CHAPTER VII-MANAGEMENT & ADMINISTRATION ANNUAL GENERAL MEETING
1st AGM within 9 months of closing of 1st F.Y. AGM can be held on Public Holiday but not on National Holiday Time- between 09.00 A.M. to 6.00 P.M. An OPC is exempt from holding AGM
CHAPTER VII-MANAGEMENT & ADMINISTRATION GENERAL MEETINGS
Notice may be given in Electronic Mode Notice of General Meeting shall also be placed on website of the Company, if any. An EGM of the Company can now be held only in INDIA
CHAPTER VII-MANAGEMENT & ADMINISTRATION MINUTES
Separate Minutes Book
Minutes to be signed within 30 days
• General Meeting of Members • Meeting of Board • Meeting of Creditors • Meeting of Committee
• BM- Chairman of Meeting or Director Authorised • GM- Chairman of Meeting or next Meeting
CHAPTER VIII-DECLARATION AND PAYMENT OF DIVIDEND
CHAPTER VIII-DECLARATION AND PAYMENT OF DIVIDEND
The dividend to be deposited in a separate bank account in Scheduled Bank within 5 days of days of declaration
Electronic mode of payment of Dividend has been recognized in the Act.
CHAPTER VIII-DECLARATION AND PAYMENT OF DIVIDEND
Transfer to Reserves of the Company- As company may consider appropriate No declaration from reserves except Free Reserves subject to rules
CHAPTER VIII-DECLARATION AND PAYMENT OF DIVIDEND UNPAID DIVIDEND Unpaid Dividend after 30 days of declaration
Transfer within 7 days thereof to unpaid Dividend A/c
Within 90 days thereof prepare Statement containing names, addresses & amount due to such members and place on website of Company
Dividend unpaid for 7 years to be transferred to IEPF-Statement to be filed with ROC
Now a member can claim refund from IEPF also
CHAPTER VIII-DECLARATION VIII-DECLARATION AND PAYMENT OF DIVIDEND UNPAID DIVIDEND- PENALTY
Non-payment within 30 days- All Directors involved • Imprisonment upto 2 years • AND • Fine ≥ Rs. 1000 1000 per day
CHAPTER IX- ACCOUNTS OF COMPANIES
CHAPTER IX- ACCOUNTS OF COMPANIES Company to maintain at its Registered Office Financial Statement that depict true and fair view of transactions including branches.
Books of Accounts with supporting to be kept for 8 years
Summarised return to be sent by the Branch Office
Non Compliance- MD, WTD (Finance) or CFO – Imprisonment upto 1 year or Fine upto 5 Lacs or Both
CHAPTER IX- ACCOUNTS OF COMPANIES Books may be kept in E-mode System for storage, retrieval, display or printout as decided by Audit Committee or Board Periodical Back-up to be kept in servers located in India Details relating to E-records to be intimated to ROC at the time of filling of Financial Statement
CHAPTER IX- ACCOUNTS OF COMPANIES FINANCIAL STATEMENTS Along with financial statements, Consolidated Financial Statements of all subsidiaries and the company shall be prepared and laid before the Annual General Meeting The company shall attach with its financial statements a separate statement containing salient features of its subsidiary For the purpose of this clause Subsidiary includes a JV or an Associate Provisions applicable to the preparation, adoption and audit of the financial statements of a holding company shall, mutatis mutandis, apply to the consolidated financial statements also
CHAPTER IX- ACCOUNTS OF COMPANIES SCHEDULE-II DEPRECIATION The useful lives of several tangible and intangible assets are significantly lower than under erstwhile Schedule XIV Useful life of asset not >the useful life specified in Part „C‟ & the residual value of an asset not be >5% of the original cost of the asset If different from the above limits, justification for the difference to be disclosed in Financial Statements For Intangible Assets Accounting Standards to be followed No separate rate for double and triple shifts No specific requirement to charge 100% depreciation on assets whose actual cost does not exceed Rs.5000/-
CHAPTER IX- ACCOUNTS OF COMPANIES FINANCIAL STATEMENTS Reopening of Accounts • Mandatory- When earlier accounts were prepared in fraudulent manner or the affairs of the Company were mismanaged casting a doubt on reliability of statements on Court/Tribunal‟s Order. • Voluntary- The Board may prepare revised financial statements in respect of any of the 3 preceding financial years after obtaining approval of the Tribunal on an application made by the company, if it appears to them that • (a) financial statements of the company; or • (b) the report of the Board, do not comply with the provisions of Section 129 (True and Fair View and AS compliant amongst others) related to financial statements or Section 134 related to financial statements / Boards Report
CHAPTER IX- ACCOUNTS OF COMPANIES BOARD REPORT-CONTENTS Annual No.
Return Extracts
of Board Meetings
Director‟s
Responsibility Statement Inter-Corporate Loans, Guarantees or Investments Contracts
or Arrangements where Directors are interested Material Changes and Commitments affecting Financial Position Statement
indicating development and implementation of a Risk Management Policy, identification of risks which in Board‟s Opinion may threaten the Company CSR Policy developed and implemented during the year
CHAPTER IX- ACCOUNTS OF COMPANIES CORPORATE SOCIAL RESPONSIBILITY
APPLICABILITY OF CSR
Net Worth ≥ 500 CR
Turnover ≥ 1000 Cr
Net Profit ≥ 5 Crore
CHAPTER IX- ACCOUNTS OF COMPANIES CORPORATE SOCIAL RESPONSIBILITY CSR
Committee
3
or more Directors PVT Co having 2 Director then 2 CSR
Expenditure - 2% of Av. N.P. of last 3 F.Y. Failure to spend- Board Report to disclose reason Preference to the local area and areas around Co. where it operates. Annual Report on CSR to form part of Board Report Display of activities on Website Activities only for Employees do not qualify CSR Policy-program & monitoring process
CHAPTER IX- ACCOUNTS OF COMPANIES CSR- ACTIVITIES
Apart from existing activities May be via Trust/Society/Section 8 Co registered by Co/Holding/Subsidiary/Associate Collaboration with other Companies Activity in India Only Contribution to Political Parties does not qualify
CHAPTER IX- ACCOUNTS OF COMPANIES CSR- SCHEDULE VII
Hunger, poverty health, sanitation
National Heritage, Art
Education
Gender Equality, Weaker section
Environment
Armed Forces
Sports
PM relief fund & other funds
Funds to Technology incubators
Rural Development
CHAPTER IX- ACCOUNTS OF COMPANIES INTERNAL AUDIT
Private Company
•Turnover ≥ Rs. 200 Cr •Outstanding Borrowings ≥Rs.100 Cr at any point of time
Internal Auditor may or may not be an employee of the Company C.A. whether in practice or not can be an Internal Auditor Audit Committee to determine the scope, periodicity, methodology etc.
CHAPTER X - AUDIT AND AUDITORS
CHAPTER X - AUDIT AND AUDITORS AUDITOR’S APPOINTMENT
For 5 years at a time
To be ratified by the shareholders at every AGM If not ratified another Auditor to be appointed Mandatory Rotation of Audit Firm after Completion of 2 consecutive terms of 5 years if Borrowings > Rs. 50 Cr or Paid-up > Rs. 20 Cr. Period prior to commencement of Act also counted Mandatory Rotation to be complied in 3 years Members may decide for rotation of Audit Partner Removal only after approval of C.G and S.R.
CHAPTER X - AUDIT AND AUDITORS PROHIBITED DEGREE OF RELATION WITH AUDITOR -Relative or Partner having following relation within prohibited degree: a. Holding any security or interest > Rs. 1 Lac
Holding
b. Indebted > 5 Lac c. Given Guarantee or provided Security >1 Lac d. Person or Firm has directly or indirectly business relationships. -Person whose relative is a Director or KMP in
Subsidi ary
Company
the Company -Person directly or via Subsidiary or associate or entity is providing services prescribed
Fellow Subsidi ary
Associa te
CHAPTER X - AUDIT AND AUDITORS
Remuneration • To be decided by AGM • Remuneration to include- a) Expenses, b) Any facility Right to access of records of subsidiaries for consolidation Auditor to comment on Internal Financial Control System and its operating effectiveness Branch Audit is mandatory Auditor bound to directly disclose to CG any fraud by officers or employees within 60 days
CHAPTER X - AUDIT AND AUDITORS COST AUDIT Applicable on Companies as Government may Order Cost Auditor’s Remuneration
as decided by BOD/Audit Committee to be ratified by Members Report submitted to Board to be filed with CG within 30 days CG may call for further information
CHAPTER XI - APPOINTMENT AND QUALIFICATIONS OF DIRECTORS
CHAPTER XI - APPOINTMENT AND QUALIFICATIONS OF DIRECTORS
OPC to have One Director (Minimum) Company can increase maximum no of Directors beyond Fifteen by passing an SR Every Company to have Resident Director (182 days) Consent, DIN and Declaration mandatory from the Director before Appointment. Every Return, Information or Particulars to be provided under the Act to mention DIN of the Director signing the same.
CHAPTER XI - APPOINTMENT AND QUALIFICATIONS OF DIRECTORS
Women Director (Public Co.) Two Independent Directors (Public Co.)
• Listed Co • Paid-Up > 100 Cr • Turnover > 300 Cr • Paid-Up > 10 Cr • Turnover > 100 Cr • Borrowing > 50 Cr
CHAPTER XI - APPOINTMENT AND QUALIFICATIONS OF DIRECTORS
Director not to be appointed without DIN Director bound to intimate changes in DIN particulars within 30 days of Change No person who failed to get appointed in AGM can be appointed as Additional Director Alternate Director may be appointed in case a Director is out of India for not less than three months.
CHAPTER XI - APPOINTMENT AND QUALIFICATIONS OF DIRECTORS DISQUALIFICATION OF DIRECTORS •
Company to File Form DIR-9 within 30 days of failure: • • •
Fails to file Financial Statement/Annual Return Fails to repay deposit, interest, dividend or Fails to redeem debentures
Director to file his disqualification with ROC Disqualification: Offence relating to related parties Not taking DIN Directorship of following Companies: •
• • •
• •
•
Non filing of Financial Statements/Annual Return Failure to pay deposit/interest/redeem Debentures or interest thereon/dividend & default continues for 1 year
Conviction for any offence under any act
CHAPTER XI - APPOINTMENT AND QUALIFICATIONS OF DIRECTORS DISQUALIFICATION OF DIRECTORS
Company to immediately file Return in case of Failure to:
• Non filing of Financial Statements/Annual Return • Failure to pay deposit/ interest/ redeem Debentures or interest thereon/dividend
CHAPTER XI - APPOINTMENT AND QUALIFICATIONS OF DIRECTORS
Vacation of Office of Director
Absence from all meetings during 12 months
Contravention of provisions relating to Related Party Transactions
Failure to disclose interest
CHAPTER XI - APPOINTMENT AND QUALIFICATIONS OF DIRECTORS
Resignation of Director •Board is duty bound to take note of resignation. •Such fact to form part of next Board Report •Director to file his resignation with ROC. •Effective Date: Date of Receipt from the Company or Date mentioned in the Resignation whichever is later. •Director shall remain liable for the offences that occurred during his tenure.
CHAPTER XII - MEETINGS OF BOARD AND ITS POWERS
CHAPTER XII - MEETINGS OF BOARD AND ITS POWERS Meetings of Board • Four Meetings in a year. • Not more than 120 days to elapse between two consecutive meetings • OPC & Small Companies to have minimum one meeting in each half of calendar year • BM to be held at a written notice of Seven Days • A BM may be held by Video Conferencing or by other Audio-Visual Means • Quorum means Quorum of uninterested Directors
CHAPTER XII - MEETINGS OF BOARD AND ITS POWERS VIDEO CONFERENCING
Matters not allowed by Video Conferencing • Approval of Annual Financial Statements • Approval of Board Report • Approval of Prospectus • Audit Committee Meeting for consideration of Annual Financial Statements • Approval of Matter relating to amalgamation, merger, demerger, acquisition & takeover
CHAPTER XII - MEETINGS OF BOARD AND ITS POWERS VIDEO CONFERENCING-PROCEDURAL ASPECTS Chairperson to ensure sufficient security Safekeeping of Record of Meeting Ensure no person other than authorised is attending Roll Call at beginning and end of meeting Ensure Audibility & visibility throughout meeting Notice to specify the option to attend by Electronic means Person intending to attend by Electronic Means shall give declaration to the effect at start of Calendar Year
CHAPTER XII - MEETINGS OF BOARD AND ITS POWERS RESOLUTION BY CIRCULATION
•
•
•
•
Now Resolution can be passed by circulation even when the Director is out of India Documents can be sent by Electronic means If 1/3rd of the Directors decide that the matter to be dealt at a meeting of the Board then such matter shall be put before the Board by the Chairperson. The Resolution passed shall be noted at next meeting and shall form part of the minutes
CHAPTER XII - MEETINGS OF BOARD AND ITS POWERS VIGIL MECHANISM
n • The mechanism for “genuine o concerns” of Directors & Employees i t allowing direct access to the audit i n committee chairman in i f “appropriate or exceptional cases” e D
CHAPTER XII - MEETINGS OF BOARD AND ITS POWERS VIGIL MECHANISM- APPLICABILITY
•Listed Companies •Co. having deposits from public •Co. having borrowing > Rs. 50 Crore
Applicability
CHAPTER XII - MEETINGS OF BOARD AND ITS POWERS VIGIL MECHANISM- OPERATION
Operation by audit committee
Audit Committee to oversee the operation of the mechanism, formulate guidelines for the activities and identify and delegate competent personnel/committee to operate the mechanism In case a Co is not required to constitute Audit Committee a Director may be nominated for same
CHAPTER XII - MEETINGS OF BOARD AND ITS POWERS VIGIL MECHANISM
Disclosure of mechanism- Website, if any, and in the Board‟s report & further communication to Employees Safeguards against victimization- Rules & Act are silent on anonymity but same may be applied
Action against repeated frivolous complaint- Suitable Action
Maintenance of adequate documentation- adequate and auditable documentation of all the concerns received, minutes of the deliberations, investigation working papers etc
CHAPTER XII - MEETINGS OF BOARD AND ITS POWERS POWER TO BE EXERCISED AFTER SPECIAL RESOLUTION
Sell, Lease or otherwise dispose of an undertaking or substantially (20% or more of value as per last audited Balance Sheet) whole of an undertaking Undertaking -investment of the company exceeds 20% of its net worth or an undertaking which generates 20% of the total income.
To exceed the borrowing beyond the Paid-up Capital and free Reserves (excluding temporary loans which are repayable on demand or within 6 months from the date of Loan) Relaxation in repayment of debt due from Director.
CHAPTER XII - MEETINGS OF BOARD AND ITS POWERS LOAN TO DIRECTORS
To Director No Direct or indirect Loan including represented by Book Debt or guarantee or security
Or other person in whom Director is interested
CHAPTER XII - MEETINGS OF BOARD AND ITS POWERS LOAN TO DIRECTORS- DIRECTOR’S INTEREST
Company Body Corporate
25% Voting power Firm
Shadow board Director
Director or Relative is partner
Director of Lending Co or Holding Co or partner or Relative
Private Co Director is Director or member
CHAPTER XII - MEETINGS OF BOARD AND ITS POWERS LOAN TO DIRECTORS- EXCEPTIONS
Managing Director or Whole Time Director (MD/WTD) • as part of Service Condition if extended to all employees • passed by Special Resolution
Holding to Wholly Owned Subsidiary (WOS) Guaranty or Security provided for Subsidiary Company Provided Subsidiary or WOS to utilise funds for its principal business activities
CHAPTER XII - MEETINGS OF BOARD AND ITS POWERS LOAN & INVESTMENT BY COMPANIES
Not more than two layers of Subsidiaries are allowed except in compliance of other laws No Loan, Security, guarantee or Investment in any Co • >60% of Paid Up, Free Reserves & securities Premium • > 100% of Free Reserves and Securities Premium Account • Whichever is more • Except by Passing Special Resolution (within 1 year of Act)
Exemption to JV (Excluding Investment) & WOS & Right Issue
CHAPTER XII - MEETINGS OF BOARD AND ITS POWERS
RELATED PARTY- DEFINITION (i) Director/ his relative; (ii) KMP / his relative; (iii) Firm- a director/ manager/relative is a partner; (iv) PVT CO - a director /manager is a member / director; (v) Public Co-a director/manager
director or holds with relatives >2% PUC;
(vi) Body Corp having Shadow Directors (vii) Any Person under whose advise board acts (viii) holding, subsidiary or an associate company (ix) Fellow Subsidiary; (x) KMP of Holding Co;
CHAPTER XII - MEETINGS OF BOARD AND ITS POWERS
RELATED PARTY TRANSACTIONS
selling or disposing, or buying, property of any kind; leasing of property of any kind; appointment of any agent for purchase or sale of goods, materials, services or property; such related party's appointment to any office or place of profit in the company, its subsidiary or associate;
CHAPTER XII - MEETINGS OF BOARD AND ITS POWERS
RELATED PARTY TRANSACTIONS
Approvals & Transactions with Related Parties
• Company with Paid-Up of 10 Crore or more-Special Resolution • For other Companies- Financial Limits on transactions
New Era of Self Regulation-No CG Approval N.A. to transactions in ordinary course at Arm‟s Length Price Transaction in urgency may be ratified within 3 months Such Contract/arrangement to be mentioned in Board Report Interested Members not to Vote
CHAPTER XII - MEETINGS OF BOARD AND ITS POWERS RESTRICTION ON NON-CASH TRANSACTIONS
Prohibition on entering into arrangement except on prior approval of Members which allows its director/director of holding, subsidiary or associate company or any person connected with him, To acquire any assets from the company for consideration other than cash and vice versa
CHAPTER XII - MEETINGS OF BOARD AND ITS POWERS RESTRICTION ON FORWARD DEALINGS
Directors & KMPs are prohibited • from forward dealings in securities of Company/ Holding/ Subsidiary/ Associate • to enter into Insider Trading
CHAPTER XIII - APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL
CHAPTER XIII - APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL
Company not to appoint or reappoint MD, WTD or manager for more than 5 years
No re-appointment earlier than 1 year before expiry of Term
Minimum age for MD/WTD is reduced from 25 to 21 years.
Terms of appointment -Approval by BOD -Approval by Members in next GM
Maximum age for them is 70. Can be relaxed if shareholders by special resolution approve it.
CHAPTER XIII - APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL
Sitting Fee payable increased to Rs. 1 Lac Every Listed Co or other public Co having Paid up > Rs. 10 Crores to have following KMPs: • MD/CEO/Manager/ WTD, • CS, and • CFO
A whole-time KMP not to hold office in more than 1 company except in Subsidiary or approval of Board
CHAPTER XIV - INSPECTION, INQUIRY AND INVESTIGATION
CHAPTER XIV - INSPECTION, INQUIRY AND INVESTIGATION SERIOUS FRAUD INVESTIGATION OFFICE
The Central Government may refer matter for investigation to SFIO either on :
• Receipt of report of Registrar under section 208 or • On receipt of special resolution from company or • In public interest or • On request from any Department of the Central Government or a State Government.
CHAPTER XV-COMPROMISES & AMALGAMATION
CHAPTER XV-COMPROMISES & AMALGAMATION
Separate and simpler provisions for the merger or amalgamation between • two small companies or • holding company and its wholly owned subsidiary company or • such other class or classes of companies as may be prescribed.
Rules are yet to be notified for the same
CHAPTER XVI - PREVENTION OF OPPRESSION AND MISMANAGEMENT
The Central Government, if it is of the opinion that the affairs of the company are being conducted in a manner prejudicial to public interest, it may itself apply to the Tribunal for an order.
