Power of Central Government to declare an establishment not to be a branch office. Any notice, certificate or other document required to be given or served under this Act or the rules made under this Act shall be deemed to have been duly given or served if sent by registered post to the registered principal place of business of the person to whom it is addressed. A resolution of the company in general meeting shall be required for varying the terms of a managing agency agreement; and before such a resolution is passed, the previous sanction of the Central Government shall be obtained therefor. It shall be the duty of every director, other officer or employee of the company to produce to the person making inspection under sub- section 1 , all such books of account and other books and papers of the company in his custody or control and to furnish him with any statement, information or explanation relating to the affairs of the company as the said person may require of him within such time and at such place as he may specify. To enable a comprehensive framework for different forms of corporate organizations, the Company Law should ensure multiple classifications of companies.
On the hearing of any application for an order under this section by the Official Liquidator or the liquidator, or of any application for leave under this section by a person against whom an order has been made on the application of the Official Liquidator or liquidator, the Official Liquidator or liquidator shall appear and call the attention of the Court to any matters which seem to him to be relevant, and may himself give evidence or call witnesses, Save as provided in sub- section 2 , no company shall, after the commencement of this Act, appoint or employ any firm or body corporate to or in any office or place of profit under the company, other than the office of managing agent, secretaries and treasurers or trustee for the holders of debentures of the company, for a term exceeding five years at a time: Provided that the initial appointment or employment of a firm or body corporate to or in any office or place of profit as aforesaid may, unless a partner in the firm, aforesaid, or a director or member of the body corporate aforesaid being a private company, or a director of the body corporate aforesaid not being a private company, is- already the managing agent of the company; or a member of the firm, a director or member of the private company, or a director of the body corporate not being a private company, which firm, private company or body corporate is already the managing agent or the secretaries and treasurers of the company. The said register shall, subject to the provisions of this section, be kept at the registered office of the company, and shall be open to inspection during business hours subject to such reasonable restrictions as the company may, by its articles or in general meeting, impose, so that not less than two hours in each day are allowed for inspection as follows:- during that or any other period, it shall be open to the inspection of any person acting on behalf of the Central Government or of the Registrar. If upon inquiry the Registrar is satisfied that any representation on which he took action under this sub- section was frivolous or vexatious, he shall disclose the identity of his informant to the company. A company may hold any shares in its subsidiary in the name or names of any nominee or nominees of the company, if and in so far as it is necessary so to do, to ensure that the number of members of the subsidiary is not reduced, where it is a public company, below seven, and where it is a private company, below two. After the balance sheet and the profit and loss account have been laid before a company at an annual general meeting as aforesaid, there shall be filed with the Registrar 2 within thirty days from, the date on- which the balance sheet and the profit and loss account were so laid 3 , or where the annual general meeting of a company for any year has not been held, there shall be filed with the Registrar within thirty days from the latest day on or before which that meeting should have been held in accordance with the provisions of this Act.
While the corporate form of organization would provide greater clarity to the stake holders and entities interacting with the business firm, the Companies Act need not compel limitations on other forms of organizations. Any charge, promissory note or any other collateral agree- ment, created, executed or entered into in relation to any share, by the ostensible owner thereof, or any hypothecation by the ostensible owner of any share, in respect of which a declaration is required to be made under the foregoing provisions of this section, but not so declared, shall not be enforceable by the beneficial owner or any person claiming through him. Every consent of the Board required under this section shall be accorded by a resolution passed at a meeting of the Board and not otherwise; and the consent of the Board required under sub- section 1 shall not be deemed to have been given within the meaning of that sub- section unless the consent is accorded before the contract is entered into within three months of the date on which if was entered into. Membership of company where the subsidiary is concerned as trustee, unless the holding company or a subsidiary thereof is beneficially interested under the trust and is not so interested only by way of security for the purposes of a transaction entered into by it in the ordinary course of a business which includes the lending of money. In the application of the provisions aforesaid, section 530 shall be construed as if the provision for payment of accrued- holiday remuneration becoming payable on the termination of employment before or by the effect of the winding up order or resolution were a provision for payment of such remuneration becoming payable on the termination of employment before or by the effect of the appointment of the receiver or possession being taken as aforesaid. Subject as aforesaid, every member of a company limited by shares and holding any preference share capital therein shall, in respect of such capital, be entitled to vote on every resolution placed before the company at any meeting, if the dividend due on such capital or any part of such dividend has remained unpaid- in the case of non- cumulative preference shares, either in respect of a period of not less than two years ending with the expiry of the financial year immediately preceding the commencement of the meeting or in respect of an aggregate period of not less than three years comprised in the six years ending with the expiry of the financial year aforesaid. The inspector may keep in his custody any books and papers produced under sub- section 1 or sub- section lA for six months and thereafter shall return the same to the company, body corporate, firm or individual by whom or on whose behalf the books and papers are produced: Provided that the inspector may call for the books and papers if they are needed again: Provided further that if certified copies of the books and papers produced under sub- section lA are furnished to the inspector, he shall return those books and papers to the body corporate concerned.
Penalty for non- compliance by auditor with sections 227 and 229. If default is made in giving effect to the orders of the Company Law Board under this section, the company and every officer of the company who is in default shall be punishable with fine which may extend to one thousand rupees, and with a further fine which may extend to one hundred rupees for every day after the first day after which the default continues. Where a statement in lieu of prospectus delivered to the Registrar under sub- section 1 includes any untrue statement, any person who authorised the delivery of the statement in lieu of prospectus for registration shall be punishable with imprisonment for a term which may extend to two years or with fine which may extend to five thousand rupees or with both, unless he proves either that the statement was immaterial or that he had reasonable ground to believe, and did up to the time of the delivery for registration of the statement in lieu of prospectus believe, that the statement was true. Where a company allots or agrees to allot any shares in or debentures of the company with a view to all or any of those shares or debentures being offered for sale to the public, any document by which the offer for sale to the public is made shall, for all purposes, be deemed to be a prospectus issued by the company; and all enactments and rules of law as to the contents of prospectuses and as to liability in respect of statements in and omissions from prospectuses, or otherwise relating to prospectuses, shall apply with the modifications specified in sub- sections 3 , 4 and 5 , and have effect accordingly, as if the shares or debentures had been offered to the public for subscription and as if persons accepting the offer in respect of any shares or debentures were subscribers for those shares or debentures, but without prejudice to the liability, if any, of the persons by whom the offer is made in respect of misstatements contained in the document or otherwise in respect thereof. Applicability of the provisions of sections 108A to 108F.
Unless the articles of the company or a contract binding on the persons concerned otherwise provide, sections 171 to 175 and sections 177 to 186 with such adaptations and modifications, if any, as may be prescribed, shall apply with respect to meetings of any class of members, or of debenture holders or any class of debenture holders, of a company, in like manner as they apply with respect to general meetings of the company. Such an entity may be provided with a simpler regime through exemptions so that the single entrepreneur is not compelled to fritter away his time, energy and resources on procedural matters. The Act contains the mechanism regarding organizational, financial, and managerial, all the relevant aspects of a company. Registrar, Deputy and Assistant Registrars of Businesses, inspectors, etc. The Act explains about the winding of the business as well and what happens in detail during liquidation period. As per the judicial view, recognition to such covenants through corporate action is possible only if they are made part of the Articles of Association of a company.
Where the share capital of a company is divided into different classes of shares, the rights attached to the shares of any class may be varied with the consent in writing of not less than three- fourths of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of the holders of the issued shares of that class-- If in pursuance of any provision such as is referred to in section 106, the rights attached to any such class of shares are at any time varied, the holders of not less in the aggregate than ten per cent. A company has distinct name and limited liability, it is a juristic person having a separate legal entity different from its members who constitute it, capable of rights and duties of its own and endowed with a potential or perpetual succession. For the purposes of enabling a company to comply with the provisions of sub- section lB , a person or firm holding, immediately before the commencement of the Companies Amendment Act, 1974 , 41 of 1974. The Central Government may direct the company whose cost accounts have been audited under this section to circulate to its members, along with the notice of the annual general meeting to be held for the first time after the submission of such report, the whole or such portion of the said report as it may specify in this behalf. The companies however, prefer that such aspects should be addressed more speedily through the corporate processes. The power of attorney should be given on Non-Judicial stamp paper of appropriate value and shall be submitted to the Registrar.
It should be one where there is a clear majority stake held by the state- i. Where a company acquires any property which is subject to a charge of any such kind as would, if it had been created by the company after the acquisition of the property, have been required to be registered under this Part, the company shall cause the prescribed particulars of the charge, together with a copy certified in the prescribed manner to be a correct copy of the instrument, if any, by which the charge was created or is evidenced, to be delivered to the Registrar for registration in the manner required by 1. The Central Government may, where a report has been made by the Registrar under sub- section 6 of section 234, or under sub- section 7 of that section, read with sub- section 6 thereof, appoint one or more competent persons as inspectors to investigate the affairs of a company and to report thereon in such manner as the Central Government may direct. Behaviour resulting in non-filing of documents or incorrect disclosures should be dealt with strictly. In case key word is required, significance of each key word should be given in the e-Form 1A. In the case of a company which was a private limited company immediately before the commencement of this Act, the Registrar shall enter the word' Private' before the word' Limited' in the name of the company upon the register and shall also make the necessary alterations in the certificate of incorporation issued to the company and in its memorandum of association. On receipt of the report referred to in sub- section 4 and the informations and explanations furnished by the company under sub- section 7 and sub- section 8 , the Central Government may take such action on the report, in accordance with the provisions of this Act or any other law for the time being in force, as it may consider necessary.
The Companies Act, 1956 prescribes specific procedures for incorporation and registration of companies. Power of Registrar to obtain further information 11. After the commencement of the Companies Amendment Act, 1960 , 65 of 1960. Time within which refusal to be communicated. It was noted that joint venture agreements have several clauses pertaining to voting rights, additional quorum requirements, arbitration provisions ousting statutory remedies, pre-emption rights or restrictions on transfer of shares.
It Company D is a subsidiary of Company C, Company D will be a subsidiary of Company B and consequently also of Company A, by virtue of clause c above; and so on. Rigid structures, unnecessary controls and regulations inhibit the risk taking initiatives of the entrepreneurs. Every company which is a limited banking company, an insurance company, or a deposit, provident or benefit society, shall, before it commences business and also on the first Monday in February and the first Monday in August in every year during which it carries on business, make a statement in the Form in Table F in Schedule I. In the case of a body corporate which is incorporated in a country outside India, a subsidiary or holding company of the body corporate under the law of such country shall be deemed to be a sub- sidiary or holding company of the body corporate within the meaning and for the purposes of this Act also, whether the requirements of this section are fulfilled or not. A condition contained in any debentures or in any deed for securing any debentures, whether issued or executed before or after the commencement of this Act, shall not be invalid by reason only that thereby, the debentures are made irredeemable or redeemable only on the happening of a contingency, however remote, or on the expiration of a period, however long. This is likely to come in the way of their future growth. If the company refuses or neglects to furnish any such information, the Central Government may appoint a competent person to investigate and report on the terms and conditions of appointment to any of the offices referred to in clause a and the provisions of section 240A shall, so far as may be, apply, to such investigation, as they apply to any other investigation made under any other provision of this Act.
Any seven or more persons, or where the company to be formed will be a private company, any two or more persons, associated for any lawful purpose may, by subscribing their names to a memorandum of association and otherwise complying with the requirements of this Act in respect of registration, form an incorporated company, with or without limited liability. At a general meeting of a public company or of a private company which is a subsidiary of a public company, a motion shall not be made for the appointment of two or more persons as directors of the company by a single resolution, unless a resolution that it shall be so made has first been agreed to by the meeting without any vote being given against it. Where the alteration proposed in the provisions of the memorandum of a body under this sub- section is with respect to the objects of the body so far as may be required to enable it to do any of the things specified in clauses a to g of sub- section 1 of section 17, the provisions of this sub- section shall be in addition to, and not in derogation of, the provisions of that section. Article 26 and further on explains about the article of association of the company which a very important part when forming a company and various amendments that can be made. If the Board does not, within twenty- one days from the date of the deposit of a valid requisition in regard to any matters, proceed duly to call a meeting for the consideration of those matters on a day not later than forty- five days from the date of the deposit of the requisition, the meeting may be called- in the case of a company not having a share capital, by such of the requisitionists as represent not less than one- tenth of the total voting power of all the members of the company referred to in clause b of sub- section 4. Stringent penalties should also be provided for any professionals, if engaged, who do not exercise due diligence at the time of incorporation. The promoters are at liberty to select type of the company viz.