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Frequently Asked Questions on the Companies Act 2013
April, 21st 2017
Frequently Asked Questions
            On
 The Companies Act, 2013




The Institute of Chartered Accountants of India
         (Set up by an Act of Parliament)
                    New Delhi
© The Institute of Chartered Accountants of India

All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system or transmitted in any form or by any means electronic,
mechanical, photocopying, recording or otherwise without prior permission in
writing from the publisher.




First Edition              :   February 2017


Committee/Department       :   Corporate Laws & Corporate Governance
                               Committee


E-mail                     :   clcgc@icai.in


Website                    :   www.icai.org



ISBN No.                   :   978-81-8441-858-3


Published by               :   The Publication Department on behalf of the
                               Institute of Chartered Accountants of India.
                               ICAI Bhawan, Post Box No. 7100,
                               Indraprastha Marg, New Delhi ­ 110 002,
                               India.
                                                            Foreword
The Companies Act, 2013 was enacted to consolidate and amend the law
relating to companies and making Indian law at par with the best
International Standards. It was one of the most significant legal reforms in
India in the recent past.
The law is aimed at easing the process of doing business in India and
improving corporate governance by making companies more accountable.
Since the Companies Act is being implemented and during the last three
years of its enactment, issues are being resolved with the issuance of
Circulars, Notifications, Amendment in Rules/ Act, Companies Removal of
Difficulty Orders etc by the Ministry of Corporate Affairs.
Still there are challenges for the stakeholders to keep themselves abreast of
the frequent developments and understanding the intricacies of various new
provisions of the law. Although, the major amendments have been proposed
in the Companies Act, 2013 through the Companies (Amendment) Bill, 2016
which is now before the Parliament.
I am happy to inform you that ICAI has been part of the consultation process
for drafting the Companies (Amendment) Bill, 2016.
I congratulate the Corporate Laws & Corporate Governance Committee of
the Institute of Chartered Accountants of India (ICAI) to take this initiative in
bringing out a comprehensive book on Frequently Asked Questions of
Companies Act, 2013 and to provide guidance to the members of the
profession for clear interpretation and understanding of the new law.
I appreciate the Corporate Laws & Corporate Governance Committee (CL &
CGC) in bringing this publication which is so useful for our members. I extend
my sincere appreciation to CA. Dhinal Shah and CA. K. Sripriya, the
Chairman and Vice Chairperson of the Corporate Laws & Corporate
Governance Committee respectively, my Council Colleagues, other members
of the Committee, Co-opted members and Special Invitees of the Committee
to bring out this important publication.
I am confident that this publication would be of great help to the members
and other stakeholders.
New Delhi                                               CA. Deveraja Reddy M
2nd February, 2017                                             President, ICAI
                                                              Preface
The Companies Act, 2013 was enacted to improve Corporate Governance
and better transparency in the corporate sector which is imperative to infuse
confidence amongst investors in Indian market and abroad and to further
strengthen regulations for the companies, keeping in view the changing
economic environment as well as the growth of our economy. The Ministry of
Corporate Affairs has been taking proactive initiatives by making the existing
law simple and comprehensive fostering a positive environment for
investment and growth.
There are 470 sections in the Companies Act, 2013 but various provisions of
the Act were notified in the last two and a half year in a phased manner.
The Companies (Amendment) Bill, 2016 is also before the Parliament where
large amendments to the Act have been proposed that were necessary for
proper and effective implementation o the Companies Act, 2013. Institute has
contributed substantially for the proposals in the Bill. Also, wherever there
are amendments proposed in the Bill, the same have been incorporated in
the respective sections.
In view of the extent and scope of changes in the new Act, the stakeholders
took some time to come to terms with the new provisions, and faced some
difficulties in the implementation of the Act.
To facilitate the understanding and interpretation of the provisions of
Companies Act, 2013, the Corporate Laws & Corporate Governance
Committee decided to bring out a publication on the Frequently Asked
Questions in the Companies Act 2013.
The publication has been designed in a question and answer format to assist
our members and fellow professionals in mitigating various queries relating to
the Companies Act, 2013.
In this connection I take this opportunity in thanking the President of ICAI,
CA. M. Devaraja Reddy and Vice President CA. Nilesh S. Vikamsey for their
moral support and encouragement in bringing out the publication. I place on
record my appreciation to CA. K. Sripriya, Vice Chairperson of the Corporate
Laws & Corporate Governance Committee and the other committee members
for their help and guidance in framing and bringing out this publication
comprising of the Frequently Asked Questions on the provisions of
Companies Act, 2013.
 

I would like to thank Ms. Purna Devi, Mr. Bikash Prasad, Ms. Sangeetha HN,
Ms. Shubhra Gupta who were involved in putting together the FAQ
I sincerely believe that the members of the profession, industries and other
stakeholders will find the publication immensely useful.


New Delhi                                     CA. Dhinal Ashvinbhai Shah
2nd February, 2017                                             Chairman
                       Corporate Laws & Corporate Governance Committee,
                                                                     ICAI




 
                                                                 Index
Sl.   Topic                                           Question    Page
No.                                                     No.        No
1.    Incorporation and allied matters                  1-24       1
2.    Capital and allied matters                        25-54      8
3.    Directors                                         55-64      16
4.    Board related matters                             65-89      20
5.    Management and Administration                    90-108      28
6.    Accounts                                         109-122     33
7.    Audit and Auditors                               123-141     37
8.    Secretarial audit                                142-151     43
9.    Deposits                                         152-157     46
10.   Dividend                                         158-165     48
11.   Corporate Social Responsibility                  166-168     51
12.   Compromise and Arrangement                       169-177     52
      Annexure                                                     54
      Annexure A ­ List of sections as notified and      -
      enforced as on 30th January, 2017
 


                                             Glossary
AGM        Annual General Meeting
AOA        Articles of Association
CA, 1956   Companies Act, 1956
CA, 2013   Companies Act, 2013
CIN        Corporate Identification Number
CSR        Corporate Social Responsibility
DIN        Director Identification Number
EGM        Extra-ordinary General Meeting
ESOP       Employees Stock Option Plan
FEMA       Foreign Exchange Management Act, 1999
ROC        Registrar of Companies
MCA        Ministry of Corporate Affairs
MOA        Memorandum of Association
OPC        One Person Company
KMP        Key Managerial Personnel
RD         Regional Director
NCLT       National Company Law Tribunal




 
        Incorporation and Allied Matters
Q1.   What is SPICE?
A1.   SPICE refers to "Simplified Proforma for Incorporating Company
      Electronically". It is a simplified integrated process for incorporating
      a company in Form No. INC-32 along with e-MOA in Form No. INC-33
      and e-AOA in Form No. INC-34. It has been recently introduced by
      the MCA and is effective from 1 October 2016.
Q2:   In case the subscriber to the MOA is a foreign national residing
      outside India, his signatures and address etc. shall be witnessed
      by a Notary Public/Embassy/Consulate offices of Embassies as
      per the Rule 13 of the Companies (Incorporation) Rules, 2014. In
      such cases, how can the DSC of such a witness be affixed?
A2:   In such cases, SPICe (INC-32) shall be filed along with the manually
      signed and duly attested MOA and AOA.
Q3:   Whether every company is required to follow the SPICe process
      for incorporation of a company?
A3:   As per Companies (Incorporation) Fifth Amendment Rules, 2016, all
      companies except Part I companies and a company having more than
      7 subscribers/promoters are required to follow the SPICe process for
      incorporation with effect from 1 January 2017.
Q4:   Can a company apply for name availability certificate by filing
      Form INC-1 prior to filing of SPICe form?
A4:   Yes, an applicant can make an application in Form INC-1 for name
      availability as per Rule 9 of the Companies (Incorporation) Rules,
      2014, and file incorporation documents through SPICe mode on
      approval of the name. However, such name shall be reserved for a
      period of 60 days from the date of making an application.
      However, as per the proposed Companies Amendment Bill, 2016
      which is yet to be notified, name shall be reserved for a period of 20
      days from the date of approval or such other period as may be
      prescribed shall be substituted.
Q5:   Can a company be incorporated without a registered office?
A5:   Yes, a company may be incorporated without having a registered
      office address by providing an address for correspondence in the
      incorporation form. However, as per Section 12 of the CA, 2013 read
Frequently Asked Questions on The Companies Act, 2013

      with Rule 25 of the Companies (Incorporation) Rules, 2014 on or from
      the 15th day of its incorporation and at all time thereafter, a company
      is required to have a registered office. The company which has not
      intimated address of its registered office at the time of incorporation
      is required to intimate to ROC of the same within 30 days of
      incorporation.
      However, as per the proposed Companies Amendment Bill, 2016
      which is yet to be notified, a Company can have its registered office
      within 30 days of its incorporation as against 15 days as per the
      present requirement.
Q6:   In case of an overseas subscriber and director, are the
      documents required to be notarised and apostilled for
      incorporation of a company?
A6:   As per Rule, 13 of the Companies (Incorporation) Rules, 2014, where
      the subscriber to the MOA or a director to be appointed is a foreign
      national residing outside India, the MOA, AOA, proof of identity as
      well as address proof shall be attested in the following manner which
      is based on the country where the subscriber/ director reside or the
      registered office is situated in case of a body corporate being the
      subscriber:
      1.     Residing in a country which is part of the Commonwealth - by
             a Notary (Public) in that part of the Commonwealth;
      2.     Residing in a country which is party to the Hague Apostille
             Convention, 1961 - by a Notary (Public) and duly apostilled in
             accordance with the said Hague Convention; and
      3.     Residing in a country which is not party to the Hague Apostille
             Convention, 1961 - the documents shall be notarized before
             the Notary (Public) of such country and the certificate of the
             Notary (Public) shall be authenticated by a Diplomatic or
             Consular Officer empowered in this behalf under Section 3 of
             the Diplomatic and Consular Officers (Oaths and Fees) Act,
             1948 (40 of 1948) i.e. attested by Public Notary and
             authenticated by Indian Embassy in the country of residence.
Q7:   What is the due date to intimate the ROC for change in the
      situation of registered office of the company?
A7:   As per Section 12(4) of the CA, 2013 read with Rule 27 of the
      Companies (Incorporation) Rules, 2014, notice of every change in the



                                     2
                                           Incorporation and Allied Matters

       situation of registered office of the company is required to be given to
       the ROC within 15 days of the change in Form INC-22.
       However, as per the proposed Companies Amendment Bill, 2016
       which is yet to be notified, every change in the situation of registered
       office of the company is required to be given to the ROC within 30
       days of the change.
Q8:    What is OPC?
A8:    As per Section 2(62) of the CA, 2013, OPC means a company which
       has only one person as a member.
Q9:    Can a non-resident become a member of an OPC?
A9:    In terms of Rule 3 of the Companies (Incorporation) Rules, 2014, only
       a natural person who is an Indian citizen and resident in India is
       eligible to incorporate an OPC. Therefore, a non-resident cannot
       become a member or nominee of an OPC.
       For the purposes of this rule, the term "resident in India" means a
       person who has stayed in India for a period of not less than one
       hundred and eighty two days during the immediately preceding one
       calendar year.
Q10: How many OPCs can be incorporated by a person or in how
     many OPCs, he shall be eligible to be a nominee?
A10:   As per Rule 3(2) of Companies (Incorporation) Rules, 2014 no person
       is eligible to incorporate more than one OPC or become nominee in
       more than one such company.
       Rule 3(2) of the Companies (Incorporation) Rules, 2014 was
       substituted vide Notification dated 27 July 2016, Companies
       (Incorporation) Third Amendment Rules, 2016, as per which a natural
       person shall not be member of more than an OPC at any point of time
       and the said person shall not be a nominee of more than an OPC.
Q11: Can a company registered under Section 8 merge with another
     company with dissimilar objects?
A11:   As per Section 8(10) of CA, 2013, a company registered under
       Section 8 can only be merged with another Section 8 company which
       has similar objects.
Q12: Is a Section 8 company required to seek permission of Central
     Government ("RD") for alteration of its AOA prior to getting the



                                      3
Frequently Asked Questions on The Companies Act, 2013

       same approved by the members by means of special resolution
       in general meeting?
A12:   Yes, as per Section 8 (4)(i) of CA, 2013, Section 8 Company is
       required to obtain prior approval of Central Government (power
       delegated to "RD") for alteration of its articles. However, members
       may pass the resolution for alteration of articles prior to the approval,
       but it shall be effective only post approval from the Central
       Government ("RD").
Q13: How will the surplus be treated in case of winding up of Section
     8 Company?
A13:   As per Section 8(9) of CA, 2013 (applicable w.e.f. 15.12.2016), any
       asset remaining after satisfaction of the debts will be transferred to
       another company registered under Section 8 of the CA, 2013 having
       similar objects, subject to such conditions as the NCLT may impose,
       or the same may be sold and proceeds thereof will be credited to the
       Insolvency and Bankruptcy Fund formed under Section 224 of the
       Insolvency and Bankruptcy Code, 2016.
Q14: What is Small Company?
A14:   As per Section 2(85) of the CA, 2013, a Small Company, other than
       public company, means a company where the:
       (a)    paid-up share capital of the company does not exceed INR 50
              Lakhs or such higher amount as may be prescribed which
              shall not be more than five crore rupees; and
       (b)    turnover as per its last profit and loss account does not
              exceed 2 Crores or such higher amount as may be prescribed
              which shall not be more than twenty crore rupees:
       Note: No higher amount has been prescribed as yet.
       Further, holding company, subsidiary company, company registered
       under Section 8 or a company or body corporate governed by any
       special act will not be considered as a small company.
       However, as per the proposed Companies Amendment Bill, 2016
       which is yet to be notified, the limit of paid up capital and turnover is
       proposed to be increased to INR 10 Crores and INR 100 Crores
       respectively.
Q15: Is it mandatory for the name of the company to be indicative of
     the nature of its business?


                                      4
                                          Incorporation and Allied Matters

A15:   No, it is not mandatory for the name to be indicative of the nature of
       its business.
Q16: Can a company have multiple and varied objects under its MOA?
A16:   The Object Clause of the MOA of a company defines the objects or
       business it can carry and there is no bar under Section 4 (1) (c) of
       CA, 2013 on a company from having multiple objectives. As a matter
       of practice, the authorities do not approve more than four to five
       objects in the Object Clause of the MOA.
       However, as per the proposed Companies Amendment Bill, 2016
       which is yet to be notified, the Company may engage in any lawful act
       or activity for the time being in force. In case, company proposes to
       pursue any specific objective, MOA shall state the said object for
       which company is incorporated.
       Thus, as per the proposed Companies Amendment Bill, 2016, the
       question on multiple object or varied object would not arise.
Q17: Is a company required to alter its AOA as per the new format
     under the CA, 2013?
A17:   As per the provisions of Section 5(6) of the CA, 2013, AOA of the
       company shall be in respective forms specified in Table F, G, H, I and
       J in Schedule I.
       Also, as per the provisions of Section 5(9) of CA, 2013, provisions
       pertaining to AOA shall not apply to the AOA of company registered
       under any previous company law unless amended under the CA,
       2013.
       It is not necessary, but advisable that subsequent to any amendment
       to the AOA, the AOA is aligned as per the format specified under the
       CA, 2013.
Q18: Is a company required to pass a special resolution for altering
     its MOA?
A18:   As per the provisions of Section 13(1) of the CA, 2013, a company is
       required to pass special resolution for altering its MOA except for the
       alteration of capital clause of MOA which could be altered by passing
       ordinary resolution as per the provisions of Section 61 of the CA,
       2013.
Q19: Is an approval from Central Government ("RD") required for
     alteration of MOA relating to change in place of registered office
     from one state to another?

                                      5
Frequently Asked Questions on The Companies Act, 2013

A19:   As per Section 13(4) of the CA, 2013, the alteration of MOA relating
       to change in place of registered office from one state to another shall
       not have any effect unless it is approved by the Central Government.
       As the powers of Central Government on this aspect are delegated to
       RD, the company will have to make an application and obtain the
       approval from the RD.
Q20: In case of shifting of registered office from one state to another
     there is a requirement of filing the order with each of the ROC's.
     Is it possible to file two forms with a single CIN?
A20:   No, it is not possible to file order approving the change of registered
       office with two different ROC's with the same CIN.
       As per Section 13 (7) of CA, 2013 read with Rule 31 of the
       Companies (Incorporation) Rules, 2014, the order of the RD
       approving the change of registered office from one state to another
       has to be filed in Form INC-28 with the ROC of each of the state
       within 30 days from the receipt of the certified copy of the order.
       Given the practical challenge, that the company cannot file Form INC-
       28 twice with the same CIN, the form is required to be filed with the
       ROC under whose jurisdiction the registered office was originally
       situated. The company will then have to file the Form INC-28 again
       with the new ROC where the registered office of Company is shifted.
Q21: What is the limit on the number of members for formation of
     association or partnership of persons?
A21:   Section 464 of the CA, 2013 provides that no association or
       partnership can be formed with the number of members exceeding
       hundred (100) subject to the Rules prescribed under the CA, 2013.
       Rule 10 of Companies (Miscellaneous) Rules, 2014 provides that no
       association or partnership can be formed with the number of
       members exceeding fifty (50).
       Therefore, the limit of number members for formation of association
       or partnership of persons is fifty (50).
Q22.   Will the notifications, circulars, rules, orders issued for certain
       type of companies under Companies Act 1956 still be applicable
       for those companies under the Companies Act 2013?
A22:   Section 465 (2) of the CA, 2013 provides that the notification, circular,
       rules, orders issued under CA, 1956, insofar as it is not inconsistent
       with the provisions of CA, 2013, be deemed to have been done or
       taken under the corresponding provisions of the CA, 2013. It further

                                      6
                                           Incorporation and Allied Matters

       provides that it shall continue to be in force, if it was in force at the
       commencement of the CA, 2013 and shall have effect as if made,
       directed, passed, given, taken, executed, issued or done under or in
       pursuance of the CA, 2013.
       Considering the aforesaid, notifications, circulars, rules, orders issued
       for certain type of companies under the CA, 1956 will also be
       applicable for those companies under the CA, 2013.
Q23.   Is a Small Company required to prepare Cash Flow Statement?
A23:   As per Proviso to Section 2(40), exemptions have been granted to
       Small Company, OPC and Dormant Company with effect from 1st
       April, 2014. Therefore, it is not mandatory for a Small Company to
       prepare Cash Flow Statement.
Q24: Is it mandatory for a company to have a common seal?
A24:   No, as per the Companies (Amendment) Act 2015, the companies are
       not mandatorily required to have common seal. Further, the existing
       companies may amend their AOA to this effect.




                                      7
                       Capital and Allied Matters
Q25: Is a private company required to follow the rules pertaining to
     issue of shares with differential voting rights?
A25:   As per notification No. GSR 464(E), dated 5th June, 2015 issued by
       MCA, Section 43 pertaining to kinds of share capital is not applicable
       to a private company, if same is provided in the MOA and AOA of that
       private company and hence, private company can issue shares with
       differential voting rights without following the conditions prescribed for
       issue of shares with differential voting rights.
Q26: Is it mandatory to issue share certificate under the common seal
     of the company?
A26:   No, it is not mandatory to issue share certificates under the common
       seal of the company. As per the Companies (Amendment) Act, 2015
       read with Companies (Share Capital and Debentures) Second
       Amendment Rules, 2015, every share certificate shall be issued
       under the common seal, if the company has a common seal.
Q27: Who is required to sign the share certificate?
A27:   As per Section 46 of the CA, 2013, read with Rule 5(3) of the
       Companies (Share Capital and Debentures) Rule, 2014, a share
       certificate can be signed in the following manner:
       a.     Company other than OPC:
       (i)    If a company has a common seal, the share certificate is
              required to be signed by two Directors and Secretary or any
              person authorized by the Board for the purpose.
       (ii)   If a company does not have a common seal, then the share
              certificates shall be signed by two directors or a Director and
              the Company Secretary, where the company has appointed a
              Company Secretary.
       b.     OPC:
       (i)    If a company has a common seal, the share certificate is
              required to be signed by one Directors or a person authorized
              by the Board of Directors of the company and Secretary or
              any other person authorized by the Board for the purpose.
                                                 Capital and Allied Matters

(ii)   If a company does not have a common seal, then the share
       certificates shall be signed by a person in whose presence the seal is
       required to be affixed.
Q28:   What are the modes available for issue of further shares?
A28:   As per Section 23 of the CA, 2013, following modes are available for
       issue of further shares:
       1.     Public Companies:
       a)     Public offer through issue of prospectus;
       b)     Private Placement/ Preferential allotment;
       c)     Issue of shares to employees under a scheme of employees'
              stock option; and
       d)     Right issue/ bonus issue
       2.     Private Companies:
       a)     Right issue/ bonus issue;
       b)     Issue of shares to employees under a scheme of employees'
              stock option; and
       c)     Issue of shares to any person through preferential allotment/
              private placement.
Q29: Can subsidiary company hold shares in its holding company?
A29:   As per Section 19 of the CA, 2013, subsidiary company cannot hold
       shares in its holding company and any such holding shall be void
       except in following circumstances:
       a)     where the subsidiary company holds such shares as the legal
              representative of a deceased member of the holding
              company;
       b)     where the subsidiary company holds such shares as a
              trustee;
       c)     where the subsidiary company is a shareholder even before it
              became a subsidiary company of the holding company.
Q30:   Can a company issue shares at a discount?
A30:   As per Section 53 of CA, 2013, no company shall issue shares at a
       discount other than issue of sweat equity shares. Any shares issued
       by a company at a discounted price shall be void.



                                     9
Frequently Asked Questions on The Companies Act, 2013

       However, as per the proposed Companies Amendment Bill, 2016
       which is yet to be notified, a company may issue shares at a discount
       to its 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 the Reserve Bank of India under the Reserve Bank of India Act,
       1934 or the Banking (Regulation) Act, 1949.
Q31: Is a company required to obtain shareholders' approval for
     preferential issue of shares?
A31:   Yes, as per Section 62(1)(c) read with Rule 13(1) of the Company
       (Share Capital and Debenture) Rules, 2014, a company is required to
       obtain shareholders' approval by way of special resolution in the
       general meeting of the company.
Q32: What is the maximum number of persons to whom private
     placement offer can be made?
A32:   As per Section 42 of CA, 2013, a company can issue securities to
       such persons not exceeding fifty or such higher number as may be
       prescribed.
       As per Rule 14 of Companies (Prospectus and Allotment of
       Securities) Rules, 2014, the limit of number of persons to whom the
       securities are to be issued cannot exceed two hundred person in
       aggregate in a financial year.
Q33: Who are exempted from being included in the limit of 200
     persons to whom private placement offer is issued?
A33:   As per Section 42 of CA, 2013 read with Rule 14 of the Companies
       (Prospectus and Allotment of Securities) Rules, 2014, any offer made
       to the qualified institutional buyers or the employees of the company
       under the employee stock option scheme are exempted from being
       considered in determining the maximum limit.
Q34: Is a share valuation report required in case of Right Issue of
     Shares?
A34:   Share valuation report is not required in case of right issue of shares.
       However, in case of issue of shares to non-resident, valuation is
       required to be carried out as per the provisions of FEMA.
Q35: Can Board of Directors of a company take a decision to issue
     Preference Shares?








                                     10
                                                 Capital and Allied Matters

A35:   No, as per Rule 9(1)(a) of Companies (Share Capital and
       Debentures) Rules, 2014, preference shares can only be issued after
       obtaining approval of shareholders through a special resolution in
       general meeting. Hence, Board of Directors can only recommend to
       the shareholders along with a detailed explanatory statement for
       approval.
Q36: Can a private company issue debentures to public?
A36:   No, a private company cannot issue debentures to public. The
       definition of a `private company' as laid down in Section 2 (68) of the
       CA, 2013 prohibits a company from inviting public to subscribe to any
       securities issued by it. Given the prohibition to subscription by the
       public, a private company can issue debentures only through private
       placement.
Q37: Is a company required to intimate the ROC post redemption of
     preference shares?
A37:   Yes, as per Section 64 of the CA, 2013, a company is required to
       intimate the particulars of redemption to the ROC in Form SH-7 within
       30 days of redemption of preference shares.
Q38: What is the form for filing return of allotment with the ROC post
     allotment of securities?
A38:   As per the provisions of Section 39(4) of the CA, 2013 read with Rule
       12 of the Companies (Prospectus and Allotment of Securities) Rules,
       2014, a Company is required to file a return of allotment within 30
       days from the date of allotment of shares in Form PAS-3 with the
       ROC along with the list of allottees.
       However, as per the proposed Companies Amendment Bill, 2016
       which is yet to be notified, in case of allotment of shares issued
       through private placement procedure, the return of allotment shall be
       filed with the ROC within 15 days from the date of allotment.
Q39: Is it mandatory to get the securities listed in case of a public
     offer?
A39:   Yes, as per Section 40 of the CA, 2013, it is mandatory for
       companies to make an application to one or more recognised stock
       exchange or exchanges and obtain permission for the securities to be
       dealt with in such stock exchange or exchange before making a
       public offer.



                                     11
Frequently Asked Questions on The Companies Act, 2013

Q40: Section 40(1) of the CA, 2013 requires a company to make an
     application to the stock exchanges for listing of securities and
     obtaining permission prior to making an offer. The requirement
     under Section 73(1) of the CA, 1956 was only to make an
     application. Hence, is it now required to obtain prior permission
     from the stock exchanges or is making an application a
     sufficient compliance?
A40:   As per Section 40(1) of the CA, 2013, it is specifically provided that
       every company which desires to make public offer should make an
       application to one or more stock exchanges and take prior permission
       for dealing in securities. Hence, company intending to make a public
       offer is required to make an application and obtain approval of
       shareholders prior to making an offer.
Q41: What is the offer period for rights issue?
A41:   As per Section 62(1)(a)(i) of the CA, 2013, the rights issue offer shall
       be kept open for a minimum period of 15 days and maximum period
       of 30 days. However, in case of a private company, offer period may
       be reduced by obtaining consent in writing or through electronic mode
       of 90% of the members of private company. [This exemption is
       available to private company vide notification No. GSR 464(E) dated
       5th June 2015].
Q42: Can a company pass the resolution for issue of securities by
     way of circulation?
A42: As per Section 179(3) of the CA, 2013, resolution with regard to issue of
       securities should be discussed and passed at a duly convened Board
       meeting and hence, resolution cannot be passed through circulation.
Q43: Can a company convert the existing shares into shares with
     differential voting rights and vice versa?
A43:   No, as per Rule 4(3) of Companies (Share Capital and Debenture)
       Rules 2014, company cannot convert its existing shares into shares
       with differential voting rights and vice versa.
Q44: What is meant by sweat equity shares and to whom can a
     company issue sweat equity shares?
A44:   As per Section 2(88) of the CA, 2013, sweat equity shares means
       shares issued at a discount or for consideration other than cash to
       the Directors and employees for providing know-how or making
       available rights in the nature of intellectual property rights or value
       addition.

                                     12
                                                 Capital and Allied Matters

       As per Rule 8(1) of the Companies (Share Capital and Debentures)
       Rules, 2014, sweat equity shares can be issued to employees of the
       company as classified below:
       permanent employee of the Company who has been working in India
       or outside India, for at least one year;
       a Director of the Company, whether a whole time Director or not;
       an employee or a director as specified above of a subsidiary or of a
       holding of the company
Q45: What is the lock-in period for sweat equity shares?
A45:   As per Rule 8(5) of the Companies (Share Capital and Debentures)
       Rules, 2014, sweat equity shares issued to the employees or
       Directors of the Company shall be locked-in for a period of 3 years
       from the date of issue and the same shall be stamped or mentioned
       in any other prominent manner on the share certificate.
Q46: What is the cap on issue of sweat equity shares?
A46:   The cap on issue of sweat equity shares is as follows:
(i)    In a year, issue shall not exceed 15% of the existing issued equity
       share capital or issue value of INR 5 crores whichever is higher;
(ii)   At any time, issue shall not exceed 25% of the total paid up equity
       capital of the Company but a start-up company can issue sweat
       equity shares not exceeding 50% of its paid up capital up to five
       years from the date of its incorporation [The Companies (Share
       Capital and Debentures) Third Amendment Rules, 2016].
Q47: Are all kinds of companies required to obtain approval of
     shareholders by means of a special resolution for issuing shares
     under ESOP?
A47:    As per Section 62(1)(b) of the CA, 2013, all companies other than
       private companies are required to obtain approval by means of a
       special resolution in general meeting for issuing shares under ESOP.
       As per notification No. GSR 464(E) dated 5 June 2015, in case of
       private companies, an ordinary resolution by the shareholders would
       suffice the requirement for issue of shares under ESOP.
Q48: Can an employee who is also a promoter of a company eligible
     to obtain sweat equity shares and employee stock of option?
A48:   As per Rule 12 of Companies (Share Capital and Debentures) Rules,
       2014, employee who is also a promoter or person belonging to the

                                     13
Frequently Asked Questions on The Companies Act, 2013

       promoter group is specifically excluded from obtaining shares issued
       under ESOP. In case of a start-up company as defined in notification
       number GSR 180(E) dated 17th February, 2016 issued by the
       Department of Industrial Policy and Promotion, Ministry of Commerce
       and Industry Government of India, Government of India, this condition
       shall not apply up to five years from the date of its incorporation or
       registration. [The Companies (Share Capital and Debentures) Third
       Amendment Rules, 2016].
       However, in case of sweat equity shares, the said exclusion is not
       specified in the provisions. Thus, an employee who is also a promoter
       of a company is eligible to get sweat equity shares and not the
       employee stock option.
Q49: Will all the employees of the company be eligible to participate
     in the ESOP?
A49:   No, only those employees as determined by the management of the
       company shall be eligible to participate in the ESOP.
Q50: Has Section 66 pertaining to reduction of capital been enforced?
A50:   Section 66 of the CA, 2013 for reduction of capital has been enforced
       with effect from 15 December 2016 and accordingly, every company
       is required to follow the provisions prescribed thereunder for
       reduction of share capital.
Q51: What is meant by the term "Buy back of Shares" and funds
     utilized for buy back?
A51:   "Buy back" is a concept by which a company purchases its own
       shares or other specified securities by following the procedures laid
       down in Section 68 of the CA, 2013. The company can utilize free
       reserves, securities premium account or proceeds of the issue of
       fresh issue shares or other specified securities to purchase its own
       shares.
Q52: What is the limit prescribed for buy back of shares?
A52:   As per the provisions of Section 68(2) of the CA, 2013, in case a
       special resolution has been passed by the members of the company
       at the general meeting, the company can buy back shares not
       exceeding 25% of the aggregate of paid-up capital and free reserves
       of the company and in case of buy back of equity shares in any
       financial year, it should not exceed 25% of its total paid-up equity
       capital in that financial year.


                                     14
                                                 Capital and Allied Matters

       Provided that the company can buy back 10% of the total paid-up
       equity capital and free reserves after obtaining approval of Board. In
       such a case, approval of the shareholders' by means of a special
       resolution will not be required.
Q53: Can a company buy back its shares if it is not authorized by its
     AOA?
A53:   As per the provisions of Section 68(2) of the CA, 2013, a company
       cannot buy back its shares if it is not authorized by its AOA.
Q54: What is the time limit for completion of buy back?
A54:   As per the provisions of Section 68(4) of the CA, 2013, every buy
       back shall be completed within a period of one year from the date of
       passing of the special resolution or resolution passed by the Board,
       as the case may be.




                                     15
                                                           Directors
Q55: What is DIN?
A55:   DIN is a unique identification number issued to a prospective director
       by the DIN cell of Ministry of Corporate Affairs ("MCA"). An individual
       should hold a DIN before being appointed as a director in any
       Company.
Q56: Is it mandatory for a director to hold digital signature?
A56:   A director who is already holding a DIN can obtain a digital signature,
       though it is not mandatory. If a person is not holding DIN and intends
       to be appointed as a Director in a Company, he should obtain a
       digital signature for making an application for obtaining DIN to the
       DIN cell.
Q57: Who can be appointed as director?
A57:   As per the provisions of Section 152 of the CA, 2013, an individual
       holding a valid DIN and not disqualified from being appointed as
       Director under Section 164 of the CA, 2013, is eligible to be
       appointed as Director. He shall give his consent to act as a director in
       writing along with the disclosure of his interest and a declaration that
       he is not disqualified to become a director under CA, 2013.
Q58: What are the broad steps involved in appointment of a director?
A58:   The broad steps involved in appointment of a director are:
              Obtain DSC;
              Obtain DIN by filing Form DIR-3;
              Declaration that he is not disqualified from being appointed as
              the Director in form DIR-8;
              Written consent of director for his appointment in form DIR-2;
              Interest of the Director if any, in any other entity in form MBP-
              1;
              Approval of Board of directors by Board Resolution;
              Approval of      Shareholders      by   shareholders    Ordinary
              Resolution;
              Intimation of appointment of director to ROC in Form DIR-12
                                                                     Directors

Q59:   Can a director be appointed by the Board of a company?
A59:   Although, as per the provisions of Section 152 of the CA, 2013, the
       directors of the Company are required to be appointed by the
       shareholders of the Company in general meeting, the Board of the
       Company, if authorised by the AOA of the company can appoint
       director under following circumstances:
              Appointment of additional director;
              Appointment of nominee director;
              Appointment of alternate director;
              Appointment of director for filling casual vacancy
Q60:   What shall be the effective date of resignation of a director?
A60:   As per the provisions of Section 168(2) of the CA, 2013, the
       resignation of a director shall take effect from the date on which the
       notice is received by the company or the date specified in the notice,
       whichever is later.
Q61:   What are the procedures to be carried out by a director at the
       time of resignation from the company?
A61:   As per the provisions of Section 168 of the CA, 2013 read with Rule
       15 and Rule 16 of the Companies (Appointment and Qualification of
       Directors) Rules, 2014, a director may resign from his office in the
       following manner:
       (i)    by giving a written notice to the Board; and
       (ii)   shall forward a copy of his resignation along with detailed
              reasons to the ROC in Form DIR-11 within 30 days of
              resignation.
       In case of resignation of a foreign director, such a foreign director can
       authorize in writing a practising chartered accountant or cost
       accountant in practice or company secretary in practice or any other
       resident director of the company to sign Form DIR-11 and file the
       same on his behalf with the ROC.
       The Company on receipt of the notice of resignation from the Director
       shall:


                                      17
Frequently Asked Questions on The Companies Act, 2013

       (i)     take the same on record;
       (ii)    intimate the ROC in Form DIR-12 within 30 days; and
       (iii)   place the fact of such resignation in the Board's Report laid in
               the immediately following general meeting of the company.
Q62: How long will the director be liable for the offences occurred
     during his tenure?
A62:   The director shall be liable for the acts / transactions occurred during
       his tenure even after resignation and disassociation with the
       company.
Q63: Who are KMPs and whether their appointment requires
     additional compliance?
A63:   KMP has been defined under Section 2(51) of the CA, 2013, to mean:
               Chief Executive Officer or Managing Director or Manager;
               Company Secretary;
               Whole Time Director;
               Chief Financial Officer
               The following companies, are required to appoint KMP and
               their appointment shall be intimated to the ROC in Form DIR
               12 and the return of their appointment shall be filed in Form
               MR 1:
                     Listed company;
                     Public company having paid up share capital of INR 10
                     crores or more
       Provided that as per Rule 8A of the Companies(Appointment and
       Remuneration Managerial Personnel), Rules, 2014, a company other
       than those mentioned above needs to appoint a whole time Company
       Secretary if its paid-up share capital is rupees five crore or above.
       Also, after the Companies (Appointment and Remuneration of
       Managerial Personnel) Amendment Rules, 2016, MR-1 is not required
       to be filed for Chief Executive Officer, Company Secretary and Chief
       Financial Officer w.e.f. 30.06.2016.
Q64: Can a director be removed from the Company?


                                         18
                                                                 Directors

A64:   Yes, shareholders of the Company may by passing an ordinary
       resolution in general meeting remove a director, but after giving a
       reasonable opportunity of being heard pursuant to Section 169 of the
       CA, 2013. A special notice would be required for passing such
       resolution. Once shareholders remove a director from the Board, the
       Board of Directors cannot reappoint him.




                                    19
                               Board Related Matters
Q65: Are all companies required to hold Board Meetings every
     quarter?
A65:   As per Section 173 of the CA 2013 and Secretarial Standards 1, all
       companies ­ whether private limited companies or public companies
       are required to hold at least four meetings of its Board of Directors in
       each quarter every year where the gap between two consecutive
       board meetings is not more than one hundred and twenty days.
       As per the notification No. GSR 466 E dated 05 June 2015, in case of
       a Section 8 company, the Board of Directors of the company shall
       hold at least one meeting within six calendar months.
       In case of an OPC, if there is only one director on the Board of
       Director, the quarterly board meetings are not required to be held.
       However, if the OPC has more than one director or in case of small or
       dormant companies, it will suffice the requirement, if they hold at
       least one meeting in each half of the calendar year and the gap
       between two meetings should not be less than ninety days. Further,
       any business which is required to be transacted at the meeting of the
       Board of Directors of a company, it shall be sufficient if, in case of
       such OPC, the resolution by such director is entered in the minutes
       book.
Q66: Can a Company restrict a director from participating in a meeting
     through video conferencing if he has not given an intimation of
     participating in the video conference meetings at the beginning
     of the year?
A66:   No, a company cannot restrict a director from participating in a
       meeting through video conference if he has not given intimation at the
       beginning of the year. An intimation given to the company or
       chairman on receipt of the notice calling the board meeting would
       suffice the requirement for attending the meeting through video
       conferencing.
Q67: What are the matters which cannot be considered at a meeting
     held through video conferencing or other audio visual means?
                                                       Board Related Matters

A67:   As per Rule 4 of the Companies (Meetings of the Board and its
       Powers) Rules, 2014, following matters shall not be considered
       through video conferencing or other audio visual means:
        (i)     Approval of annual financial statements;
        (ii)    Approval of board's report;
        (iii)   Approval of prospectus;
        (iv)    Audit Committee Meetings for consideration of financial
                statement including consolidated financial statement, if any,
                to be approved by the Board of Directors pursuant to Section
                134(1) of the CA, 2013;
        (v)      Approval of the matter relating to amalgamation, merger,
                demerger, acquisition and takeover.
       However, as per The Companies (Amendment) Bill, 2016, which is
       yet to be notified, has proposed participation of Directors on certain
       items at Board Meetings through video conference or other audio
       visual means if there is quorum through physical presence of
       Directors.
Q68: Is the notice calling for the board meeting required to state that
     the meeting is being convened at a short notice?
A68:   Yes, as per Secretarial Standards-1 effective from 1 July 2015, a
       company is required to state the fact that the board meeting is
       convened at a short notice in the notice calling the meeting. However,
       the CA, 2013 is silent in this regard.
Q69: Can a director interested in the contract participate in the board
     meeting or be counted for quorum as per Section 174 of CA
     2013?
A69:   As per provisions of Section 188 of the CA 2013, if any director is
       directly or indirectly, concerned or interested in a contract or
       arrangement or proposed contract or arrangement then such director
       shall disclose the nature of his concern or interest at the meeting of
       the Board in which the contract or arrangement is discussed and shall
       not participate in such meeting.
       However, in case of a private limited company, as per notification No.
       GSR 464E dated 5th June 2015, an interested director can participate
       and vote in a board meeting after disclosing his interest in the
       particular transaction. The interested director, will be included for the
       purpose of determining the quorum of the meeting.

                                      21
Frequently Asked Questions on The Companies Act, 2013

Q70: Can meetings of the Audit Committee be held through video
     conference?
A70:   Yes, the meetings of Audit Committee can be held through video
       conference except the meeting where financial statements including
       consolidated financial statements is considered for approval under
       Section 134(1) of CA, 2013.
Q71: Is a company required to obtain approval of the Audit Committee
     for all the transaction entered into with related parties?
A71:   Yes, as per Section 177 of CA, 2013 read with Rule 6 and 6A of the
       Companies (Meetings of Board and its Power) Rules, 2014, a
       company is required to obtain approval of the Audit Committee for all
       the transactions entered into with related parties. Also, the Audit
       Committee has an option to grant omnibus approval which shall be
       valid for a period of one financial year.
       However, as per the Companies (Amendment) Bill, 2016 which is yet
       to be notified, proposes to insert following amendments:
              Ratification by Audit Committee of transactions involving
              amount not exceeding INR 1 Crores within 3 months of
              transaction;
              Consequences of non-ratification of the transactions;
              Exemption from approval of audit committee to transaction
              between a holding company and its wholly owned subsidiary.
Q72: Which powers of the board are required to be exercised at a duly
     convened board meeting?
A72:   As per Section 179 of CA, 2013 read with Rule 8 the Companies
       (Meeting of Board and its Powers) Rules 2014, following powers of
       the Board can be exercised by means of a resolution passed at a duly
       convened Board meeting:
       (a)    To make calls on shareholders in respect of money unpaid;
       (b)    To authorise buy back of securities;
       (c)    To issue securities, including debentures, whether in or
              outside India;
       (d)    To borrow monies;
       (e)    To invest the funds of the company;



                                    22
                                                     Board Related Matters

       (f)    To grant loans or give guarantee or provide security in respect
              of loans;
       (g)    To approve financial statements and the Board's report;
       (h)    To diversify the business of the company;
       (i)    To approve amalgamation, merger or reconstruction;
       (j)    To take over a company or acquire a controlling or substantial
              stake in another company;
       (k)    To make political contributions;
       (l)    To appoint internal auditors and secretarial auditor;
       (m)    To appoint or remove KMP;
       As per the notification dated 5 June 2015, in case of a Section 8
       Company, matters referred to in point no. (d), (e) and (f) may be
       decided by the Board by circulation instead of at a meeting.
Q73: Can a private company grant loan to its directors?
A73:   Sec 185 of the CA 2013 restricts loans to directors including private
       limited companies. However as per the notification dated 6th Jun
       2015, a private company may grant loan to its directors subject to
       fulfilment of all of the following conditions:
              No body corporate has invested in the share capital of the
              company;
              Borrowings from banks/financial institutions/any other body
              corporate is less than twice the paid up share capital of the
              company and fifty crores whichever is lower; and
              There is no subsisting default in repayment of existing
              borrowings at the time of the transaction.
Q74.   Can loan be given by a holding company to its wholly owned
       subsidiary company or a guarantee given or security provided
       by a holding company to any loan made to its wholly owned
       subsidiary?
A74:   Yes, as per the proviso to Section 185(1) loan given by a holding
       company to its wholly owned subsidiary company or a guarantee
       given or security provided by a holding company in respect of any
       loan made to its wholly owned subsidiary company is exempt from
       the purview of Section 185 of CA, 2013 provided the same is utilised
       for the principal business activities by the subsidiary.


                                     23
Frequently Asked Questions on The Companies Act, 2013

Q75: Is a private company exempt from Section 186 of CA, 2013?
A75:   A private company is not exempt from the applicability of Section 186
       of CA, 2013.
Q76: Is loan to an employee covered within the ambit of Section 186
     of the CA, 2013?
A76:   As per General Clarification No.04/2015 issued by the Ministry of
       Corporate Affairs dated 10 March 2015, loans and/or advances made
       by the companies to their employees, other than the managing or
       who-time director are not governed by the requirement of Section 186
       of the CA,2013. This clarification will however, be applicable if such
       loans/advances to employees are in accordance with the conditions
       of service applicable to employees and are also in accordance with
       the remuneration policy, in cases where such policy is required to be
       formulated.
       Further, as per the Companies (Amendment) Bill, 2016 which is yet to
       be notified, proposes to exclude `employees' from the definition of
       `any person'.
Q77: Will salary advances made by the Company for only one or two
     months (without interest) come within the preview of "Loan"?
A77:   There is a difference between advance and loan. Loan is lending of
       money with absolute promise to repay whereas advance is to be
       adjusted against supply of goods and services. Advance given to
       employees against current month's salary will not be in the nature of
       loan and the same will not fall within the purview of Section 186.
Q78: Is unanimous consent of the board required for entering into a
     transaction under Section 186?
A78:   Yes, as per Section 186(5) of the CA, 2013, consent of all the
       directors present at the meeting is required for entering into a
       transaction.
Q79: When is the approval from the public financial institutions not
     required for entering into transactions under Section 186?
A79:   As per the proviso to Section 186(5) of the CA, 2013, approval of
       public financial institutions is not required under the below
       circumstances:
              The amount involved in the transaction does not exceed 60%
              of the paid up share capital, free reserves and securities


                                     24
                                                       Board Related Matters

              premium account and 100% of its free reserves and securities
              premium account, whichever is higher; and
              There is no default in repayment of loan installments and
              interest to public financial institutions.
Q80: What is the due date for making entries in the new format of
     Register of Loans, Guarantees, Security and Acquisition? Also,
     is a company required to update the transactions covered under
     Section 372A of the CA 1956?
A80:   Since, 1 April 2014 it is mandatory for a company to maintain the
       Register of Loans, Guarantee, Security and Acquisition made by the
       company in Form MBP-2. Also, as per the clarification issued by MCA
       vide Circular No. 15/2014, registers maintained by companies
       pursuant to Section 372A (5) of the CA, 1956 may continue as per the
       requirement under these provisions and the new format prescribed
       (MBP-2) shall be used for transactions entered on and from 1 April
       2014.
Q81: Which are the transactions covered under Section 188 of the CA,
2013?
A81:   The following transactions are covered under Section 188 of the CA,
       2013:
              Sale, purchase or supply of goods or materials;
              Sale or disposal of or buying of property of any kind;
              Leasing of property of any kind;
              Availing of or rendering any services;
              Appointment of an agent for purchase or sale of goods,
              materials, services or property;
              Related party's appointment to any office or place of profit in
              the company or its subsidiary or associate company;
              Underwriting of subscription of any securities or derivatives;
Q82: Can Company provide interest free loans?
A82:   No, the Company shall not provide any loan without interest. As per
       Section 186(7) of the CA, 2013, no loan shall be given at a rate lower
       than the prevailing yield of one year, three year, five year or ten year
       Government Security closest to the tenor of the loan.



                                     25
Frequently Asked Questions on The Companies Act, 2013

Q83: Which are the transactions that would not require approval of
     the shareholders under Section 188?
A83:   As per Section 188(1) of the CA, 2013, following transactions do not
       require approval of the shareholders under Section 188 of the CA,
       2013:
              Transactions in ordinary course of business and on arm's
              length basis;
              Transactions between holding company and wholly owned
              subsidiary company whose accounts are consolidated and
              laid before shareholders at AGM.
Q84: Can a member of a private company interested in a particular
     transaction participate and vote at a general meeting?
A84:   Yes, an interested member of a private company can participate and
       vote at general meeting on matters requiring approval for related
       party transaction pursuant to exemption Notification No. GSR 464(E),
       dated 05th June, 2015.
Q85: Can a Director who is also a member of a private company
     participate and vote at a meeting for the transaction related to
     payment of remuneration to such directors?
A85:   Yes, an interested Director who is also a member of a private
       company can participate and vote at meeting to approve the
       transactions related to payment of remuneration to such Director.
Q86: In what circumstances is the prior approval of Board required for
     entering into specified contracts or arrangements with related
     parties under Section 188?
A86:   As per Section 188 of the CA 2013, Board's approval is required for
       the contracts or arrangements with related parties specified in
       Section 188(1) (a) to (g) which are either not in ordinary course of
       business or not at arm's length basis. Further, in the case the
       transactions exceed the prescribed threshold, prior approval by
       ordinary resolution of the company shall be required for entering into
       such contract or arrangement with related party.
Q87: As per the second proviso to Section 188 (1) of the CA, 2013, no
     member of the company shall vote on such ordinary resolution,
     to approve any contract or arrangement which may be entered
     into by the company, if such member is a related party.
       What is the meaning of related party in such cases?

                                     26
                                                       Board Related Matters

A87:   The MCA vide General Circular No. 30/2014 dated 17 July 2014 has
       clarified that `related party' referred to in the second proviso has to be
       construed with reference to the contract or arrangement for which the
       said ordinary resolution is being passed. Thus, the term `related
       party' in the above context refers only to such related party with
       whom the contract or arrangement is being proposed and for which
       the said ordinary resolution is being passed.
       However, as per the Companies (Amendment) Bill, 2016 which is yet
       to be notified, proposes to remove non-participation of related party
       shareholder of a public Company, in passing of the resolution of such
       public Company in which 90% or more members, in number, are
       relatives or promoters of related parties.
Q88: Which are the transactions exempted from being entered in
     Register of Contracts and Arrangements in which the directors
     are interested?
A88:   The following transactions are exempted from being entered in the
       Register of Contracts and Arrangements in which the directors are
       interested:
       Sale/purchase/supply of any goods/services, if the value does not
       exceed five lakh rupees in the aggregate in any year
              Transaction by a banking company for the collection of bills in
              the ordinary course of its business
Q89: Which are the different type of companies required to adopt vigil
     mechanism?
       A89: Pursuant to Section 177(9) of the CA, 2013 read with Rule 7 of
       the Companies (meetings of Board and its Power) Rules, 2014, Vigil
       Mechanism is required to be adopted by the following companies:
              Every listed company;
              Companies which accept deposits from the public;
              Companies which have borrowed money from banks and
              public financial institutions in excess of fifty crore rupees.




                                      27
         Management and Administration
Q90: When should a company convene its first AGM?
A90:   As per Section 96 of the CA, 2013, the first AGM of a company
       should be held within a period 9 months from the date of close of first
       financial year.
       Example ­ If a company's financial year ends on 31 March, the first
       AGM of the company shall be held latest by 31 December of that
       year.
Q91: Can AGM be held at a place situated outside the limit of city,
     town or village in which the Registered Office is situated?
A91:   As per the provisions of Section 96(2) of the CA, 2013, AGM cannot
       be held at a place situated outside the limit of city, town or village in
       which the Registered Office is situated. Provided in case of
       Government companies, AGM can be held at a place which the
       Central Government may approve i.e. a Government Company can
       convene its AGM at a place other than limit of city, town or village in
       which the Registered Office is situated if the Central Government
       may approve.
       However, as per the proposed Companies Amendment Bill, 2016
       which is yet to be notified, AGM of an unlisted company may be held
       at any place in India if consent is given in writing or by electronic
       mode by all the members in advance.
Q92: Can AGM be convened at shorter notice?
A92:   Yes, as per Section 101(1) of the CA, 2013, AGM can be convened
       after giving a shorter notice subject to consent in writing or in
       electronic mode is received from 95% of the members entitled to vote
       thereat.
Q93: What shall be the Quorum of an AGM?
A93:   As per Section 103 of the CA, 2013, quorum for the AGM of a private
       limited company is 2 members personally present, but in case of
       public limited company, quorum for AGM is based on the number of
       members in the Company, as stated below:
                                          Management and Administration

             Quorum required              Total number of member in the
                                                   Company
         (members to be personally
                present)


                     5                            Less than 1000
                     15                            1000 to 5000
                     30                           More than 5000

Q94: Can EGM be held at a place situated outside India?
A94:   No, EGM of a company cannot be held outside India.
       However, as per the proposed Companies Amendment Bill, 2016
       which is yet to be notified, EGM of a company, other than a wholly
       owned subsidiary of a company incorporated outside India, shall be
       held at a place within India.
Q95: Who can be appointed as proxy?
A95:   As per Section 105 of the CA, 2013, proxy need not be a member of
       the company and any person can be appointed as a proxy.
Q96: What are the restrictions on a proxy during the shareholders
     meeting?
A96:   As per Section 105 of the CA, 2013, at a shareholders meeting, a
       proxy can vote only through poll and not by show of hands. Also a
       proxy is not entitled to speak at the meeting.
Q97: Can a member of Section 8 Company appoint any other person
     as its proxy?
A97:   No, as per Rule 19 of Companies (Management and Administration)
       Rules, 2014, a member of Section 8 Company can appoint only
       another member of the same company as its proxy.
Q98: For how many members can a person be appointed as a proxy?
A98:   As per Section 105 of the CA, 2013, read with Rule 19 of the
       Companies (Management and Administration) Rules, 2014, a person
       can act as proxy on behalf of maximum 50 members and holding
       voting rights on shares not more than 10% of total share capital.




                                     29
Frequently Asked Questions on The Companies Act, 2013

       In case of a person holding proxy for a member, holding voting rights
       on shares for more than 10% of total share capital, he/she cannot
       hold a proxy for another member in the same company.
Q99: Can one member appoint more than one proxy?
A99:   Yes, a person can appoint more than one proxy.
Q100: When can a proxy be appointed? Can a person be appointed as a
      permanent proxy for a member?
       A100: As per the provisions of Section 105 of the CA, 2013, proxy
       can be appointed by a member any time after the notice is issued, but
       the same should reach the company 48 hours before the scheduled
       meeting. A person cannot be appointed as a permanent proxy for a
       member.
Q101: Can a director appointed as a Chairman at the meeting of the
      Board for the purpose of convening such meeting be considered
      as a person holding the positon of Chairman of the Company?
A101: A director appointed as a Chairman at the meeting of the Board for
      the purpose of convening such meeting cannot be considered as a
      person holding the positon of Chairman of the company. In case a
      company is willing to designate a director as Chairman of the
      company, a separate resolution with this affect is required and the
      necessary intimations shall be given to the ROC.
Q102: What is the period prescribed for preserving the annual returns
      prepared under the CA, 2013?
A102: Pursuant to Rule 15(3) of the Companies (Management and
      Administration) Rules, 2014, the Copies of annual returns prepared
      under Section 92 and copies of all certificates and documents
      required to be annexed thereto shall be preserved for a period of
      eight years from the date of filing with the ROC.
Q103: What are the requirements of signing of Annual Return?
A103: Pursuant to the provisions of Section 92 of the CA, 2013 read with
      Rule 11 of the Companies (Management and Administration) Rules,
      2014, annual return shall be signed in the following manner:
       (i)    In case of a Small Company and OPC, the annual return shall
              be signed by Company Secretary or where there is no
              Company Secretary, by the Director of the Company.




                                    30
                                           Management and Administration

       (ii)   In case of other companies, the annual return shall be signed
              by a Director and the Company Secretary, or where there is
              no Company Secretary, by a Practising Company Secretary.
Q104: What are the certification requirements of Annual Return?
A104: Pursuant to Section 92(2) of the CA, 2013 read with Rule 11(2) of the
      Companies (Management and Administration Rules, 2014, the
      Annual Return of the following companies shall be certified by a
      Company Secretary in whole time practice in Form No. MGT-8:
              Every listed company;
              Every company having paid up share capital of INR 10 crore
              or more;
              Every company having turnover of INR 50 crore or more
Q105: Is the extract of the Annual Return required to be attached to
      Board's Report in terms of Section 134 (3)(a) of the CA, 2013?
A105: An extract of the annual return in form MGT-9 relating to the financial
      year to which the Board's Report relates shall be attached therewith
      in terms of Section 134 (3)(a) of the CA, 2013.
Q106: In case the AGM is not held, what is the time limit for filing the
      Annual Return?
A106: As per Section 92(4) of the CA, 2013, in case the AGM of a company
      is not held, the Annual Return has to be filed within 60 days from the
      last date on which AGM should have been held together with the
      statement specifying the reasons for not holding the AGM.
Q107: Which registers should include the index of names?
A107: As per Section 88(2) of the CA, 2013, the following registers should
      include an index of names:
              Register of members;
              Register of debenture holders;
              Register of any other security holders.
       Provided that an index is not mandatory if the number of members
       are less than 50
Q108: What is the duration for preservation of Statutory Registers?




                                      31
Frequently Asked Questions on The Companies Act, 2013

A108: As per Rule 15 of the Companies (Management and Administration)
      Rules, 2014, the Statutory Registers are to be preserved in the
      following manner:
            Register of members        :            Permanently
            Register of debenture :        To be preserved for 8 years
            holders & register of          from the date of redemption of
            any    other  security         debenture or securities as the
            holders                        case may be
            Foreign Register      of   :   Permanently, unless it is
            members                        discontinued and all the
                                           entries are transferred to any
                                           other foreign register or to the
                                           principal register
            Foreign Register      of   :   To be preserved for 8 years
            debenture holders              from the date of redemption of
                                           debenture or securities as the
                                           case may be




                                  32
                                                          Accounts
Q109: What shall be the first financial year of the newly incorporated
      company or body corporate?
A109: As per Section 2(41) of the CA, 2013, the first financial year of a
      company means a period beginning from the date of incorporation
      and ending on 31 March of the following year.
Q110: In case any existing auditor incurs disqualifications as per the
      CA 2013, what is the procedure to be followed for appointment of
      new auditor? Is the company also required to follow the
      procedures relating to removal of auditor as prescribed in the
      CA, 2013?
A110: As per Section 141(4) the CA, 2013, an auditor once disqualified shall
      vacate office and which in turn results in casual vacancy. The casual
      vacancy can be filled by the board of directors within 30 days of such
      disqualification and the process relating to removal of Auditors is not
      required to be followed.
       It may be noted that the auditor so appointed holds office only till the
       conclusion of the next AGM.
Q111: How does the requirement of rotation of auditor apply to a
      company having a calendar year end or June Year-end?
A111: Appointment/re-appointment of auditor takes place at the AGM and is
      valid until the conclusion of the next AGM irrespective of the year
      end. The period of five years will be counted from AGM to AGM.
Q112: Who shall sign the Financial Statements of a Company?
A112: The Financial Statements of a company is required to be signed as
      per the provisions of Section 134 of the CA, 2013 by:
              The chairperson of the company (if he is authorised by the
              Board) or by two directors (out of which 1 shall be Managing
              Director/ Chief Executive Officer if any); and
              Chief Financial Officer and Company Secretary wherever they
              are appointed
       However, the Companies (Amendment) Bill, 2016 which is yet to be
       notified, enables Chairperson if he is authorized or two directors out
       of which one shall be MD, if any and the CEO, the CFO and the
Frequently Asked Questions on The Companies Act, 2013

       Company Secretary, wherever they are appointed, to sign the
       financial statements of the company.
Q113: Can a company maintain books of account in any place other
      than Registered Office?
A113: As per the provisions of Section 128 of the CA, 2013 read with Rule
      2A of the Companies (Accounts) Rules, 2014, a company may
      maintain books of account and other relevant papers may be kept at
      such other place in India as the Board of Directors may decide and
      where such a decision is taken, the company shall, within seven days
      thereof, file with the ROC a notice in Form AOC-5 giving the full
      address of that other place.
Q114: If the Notice of the AGM is circulated at a short notice, can the
      financial statements also be sent along with the notice?
A114: Yes, a company holding a general meeting after giving a short notice
      as provided under Section 101 of the CA, 2013 may also circulate
      financial statements at such short notice.
       However, the Companies (Amendment) Bill, 2016 which is yet to be
       notified, proposes to enable the Company to send copy of the
       financial statements at a period lesser than 21 days if 95% of the
       members entitled to vote at the meeting agrees for the same.
Q115: What is the duration for preserving the Books of Account?
A115: As per Section 128(5) of the CA 2013, the books of account shall be
      preserved by the company for 8 financial years preceding the
      financial year.
Q116: Is it required to attach Board's Report to the consolidated
      financial statements?
A116: Yes, as per Section 134 (3) of the CA, 2013, the Board's Report shall
      be attached to the consolidated financial statements.
Q117: Are the standalone financial statements of the associates/joint
      ventures required to be placed on the website too?
A117: As per fourth proviso to Section 136(1) of the CA 2013, every
      company having a subsidiary or subsidiaries shall place separate
      audited accounts in respect of each of its subsidiary on its website, if
      any. Therefore, there is no requirement of placing standalone
      financial statements of associates/joint ventures on the website of the
      company.


                                     34
                                                                     Accounts

       However, the Companies (Amendment) Bill, 2016, inserts the
       following provisions w.r.t foreign subsidiary.
       If a Listed Company which has a foreign subsidiary and:
       If the foreign subsidiary is statutorily required to prepare consolidated
       financial statement under the law of any country, the requirement
       shall be met if such consolidated accounts are placed on the website;
       If the foreign subsidiary is not required to audit its financial
       statements, the Listed Company may place the unaudited financial
       statement on its website and if the language is not English, a
       translated copy of the same shall be placed on the website.
Q118: Can a branch office of the company maintain its books of
      account in the location of branch office?
A118: Yes, as per Section 128(2) the CA, 2013, the Company may maintain
      books of account relating to the transactions effected at the branch
      office at branch provided summarised returns are periodically sent to
      the registered office.
Q 119: Whether the subsidiary of a company under liquidation is
       required to consolidate its accounts as per Section 129 of the
       CA, 2013?
A119: Since the holding company under liquidation is not required to have
      the accounts prepared as per Section 129 the CA, 2013, its
      subsidiary company's accounts shall not be consolidated with the
      aforesaid holding company. However, the reasons for not
      consolidating must be explained in the notes as required by Schedule
      III.
Q120: Is it required to comply with Accounting Standards while
      preparing the financial statements?
A120: Yes, as per Section 129(1) of the CA, 2013, the financial statements
      should be prepared in accordance with the accounting standards.
      Further, as per Section 129 (5) of the CA, 2013, in case of deviation
      from accounting standards, the financial statements must disclose the
      fact of such deviation and reasons for the same along with its
      financial effects.
Q121: What are the modes available for the company to maintain the
      books of account?
A121: The Company may maintain books of account either physically or
      electronically. In case the books of account is maintained

                                      35
Frequently Asked Questions on The Companies Act, 2013

       electronically, the back-up of the books of account and other books
       and papers of the company shall be kept in servers physically located
       in India on a periodic basis.
Q122: Can a company keep the books and registers at a place other
      than registered office of the company?
A122: Yes, as per Proviso to Section 128 (1), the books may be kept at
      such other place in India as the Board of Directors may decide after
      passing resolution in the duly held Board Meeting of the company.




                                    36
                                     Audit and Auditors
Q123: Which companies are required to appoint Internal Auditor?
A123: As per Section 138 of the CA, 2013 and Rule 13 of Companies
      (Accounts) Rules, 2014, the following companies are required to
      appoint an internal auditor:
       listed company;
       every unlisted public company having at any point of time during the
       preceding financial year -
o      paid up share capital of INR 50 crores or more; or
o      turnover of INR 200 crores or more; or
o      outstanding loans or borrowings from banks or public financial
       institutions for more than INR 100 crores; or
o      outstanding deposits of INR 25 crore rupees or more
       every private company having at any point of time during the
       preceding financial year -
o      turnover of INR 200 crores or more; or
o      outstanding loans or borrowings from banks or PFI for more than INR
       100 crores
Q124: Who can be appointed as Internal Auditor of the Company?
A124: As per the provisions of Section 138 of the CA, 2013 read with Rule
      13 of the Companies (accounts) Rules, 2014, a "Chartered
      Accountant" or "Cost Accountant" whether engaged in practice or not,
      or such other professional as may be decided by the Board of
      Directors of the company can be appointed as internal auditor of the
      Company. The internal auditor may or may or may not be an
      employee of the company.
Q125: Can internal Auditor be appointed by way of a circular
      resolution?
A125: No, as per Section 179 the CA, 2013 read with applicable rules,
      Internal Auditor shall be appointed at the duly convened board
      meeting of the Company.
Q126: Can the Statutory Auditor and Cost Auditor be the same person
      or firm?
Frequently Asked Questions on The Companies Act, 2013

A126: As per the proviso to the Section 148(3) the CA, 2013, the person
      appointed under Section 139 the CA, 2013 as an auditor of the
      company shall not be appointed for conducting the audit of cost
      records.
Q127: When should the first auditors be appointed?
A127: As per Section 139 of the CA, 2013, the first auditors should be
      appointed by the Board within 30 days of the registration of the
      company and in case of failure of the Board to appoint such auditors,
      the auditors shall be appointed by the members in general meeting.
      Further, such auditor shall hold office till the date of the conclusion of
      the first AGM.
Q128: What is the term of appointment of an individual and a firm as a
      statutory auditor?
A128: As per Section 139(2) the CA, 2013 read with Rule 5 of Companies
      (Audit and Auditors) Rules, 2014, the following companies shall not
      appoint an individual as statutory auditor for more than one term of 5
      years and a firm as statutory auditor for more than two terms of 5
      year each:
       Listed company;
       All unlisted public companies having paid up share capital of INR 10
       Crores or more;
       All private limited companies having paid up share capital of INR 20
       Crores or more;
       All companies having paid up share capital below the threshold limit
       mentioned in the aforesaid two points, but having public borrowings
       from financial institutions, banks or public deposits of INR 50 Crores
       or more
Q129: Is there any transition period provided for complying with the
      provisions of Section 139 (2) of the CA, 2013 relating to rotation
      of auditors?
A129: As per Companies (Removal of Difficulties) Third Order, 2016 dated
      30th June, 2016 issued by the MCA, the classes of companies stated
      under Q128 are required to comply with the provisions of Section
      139(2) the CA, 2013 relating to rotation of auditors not later than the
      AGM to be held in the year 2017.
Q130: Which are the classes of companies required to comply with the
      provisions relating to rotation of auditors?

                                      38
                                                        Audit and Auditors

A130: As per Section 139(2) of the CA, 2013 read with Rule 5 and Rule 6 of
      Companies (Audit and Auditors) Rules, 2014, the following
      companies are required to rotate their auditors on expiry of the term:
       Listed company;
       All unlisted public companies having paid up share capital of INR 10
       Crores or more;
       All private limited companies having paid up share capital of INR 20
       Crores or more;
       All companies having paid up share capital below the threshold limit
       mentioned in the aforesaid two points, but having public borrowings
       from financial institutions, banks or public deposits of INR 50 Crores
       or more
Q131: In case of Companies which have already appointed auditors in
      CA, 1956, how should the period of 5 years and 10 years for
      rotation of auditors be computed?
A131: As per Rule 6(3) of the Companies (Audit and Auditors) Rules, 2014,
      the period for which the individual or the firm has held office as
      auditor prior to the commencement of the CA, 2013 shall be taken
      into consideration for the purpose of rotation of auditors.
       For example, in case of listed and prescribed companies, if an
       individual has completed four years as an auditor on April 01, 2014,
       he can continue for 3 years in the same company.
       Further, if the auditor is required to appointed again, he may do so
       after the cooling period of five years from the completion of term of
       five years.
Q132: Can a company remove its auditor?
A132: As per Section 140(1) of the CA, 2013 read with Rule 7 of Companies
      (Audit and Auditors) Rules, 2014, a company may remove its auditor
      before the expiry of the term by obtaining prior approval of the
      Central Government and passing a special resolution in general
      meeting.
Q133: Is there limit on the number of audits an auditor may undertake?
A133: As per Section 141(3)(g) of the CA, 2013, an auditor cannot
      undertake audit of more than twenty companies.
       In case of private companies, while calculating the limit of 20, one
       person companies, dormant companies, small companies and private

                                     39
Frequently Asked Questions on The Companies Act, 2013

       companies having paid up share capital less than one hundred crore
       rupees shall be excluded. [Notification No. GSR 464(E), dated 5th
       June, 2015]
Q134: Who shall fix the remuneration of Auditors?
A134: As per Section 142(1) of the CA, 2013, the remuneration of the
      auditor of a company shall be fixed in its general meeting or in such
      manner as may be determined by the Board of Directors, which shall
      include any out of pocket expenses incurred for the purpose and in
      connection with the audit. Provided further, that the Board may fix the
      remuneration of the first auditor appointed by it.
Q135: Is it the duty of the auditor to confirm on internal financial
      controls?
A135: As per Section 143(3)(i) of the CA, 2013 the auditor is required to
      state the adequacy of internal financial control systems and its
      operating effectives.
       However, as per the Companies (Amendment) Bill, 2016 which is yet
       to be notified, it is proposed that the auditors are required to report on
       Internal Financial Control with reference to financial statements.
Q136: Who shall appoint an auditor of a Government Company?
A136: As per Section 143(5) of the CA, 2013, the auditor of a Government
      Company shall be appointed by the Comptroller and Auditor General
      of India ("CAG"). Further, w.e.f. 4th September 2014, auditor of any
      other company owned or controlled directly or indirectly by Central
      Government or State Government and partly by Central Government
      and partly by one or more State Governments shall also be appointed
      by CAG.
Q137: Which services are not to be rendered by auditor of a company?
A137: As per Section 144 of the CA, 2013, an auditor shall not provide any
      of the following services:
       (a)    Accounting and Book keeping services
       (b)    Internal Audit
       (c)    Design and implementation of any financial information
              system
       (d)    Actuarial services
       (e)    Investment advisory services


                                      40
                                                       Audit and Auditors

       (f)    Investment Banking services
       (g)    Rendering of outsourced financial services
       (h)    Management services
Q138: What are the provisions for Reporting Fraud under CA, 2013?
A138: The provisions on reporting fraud have been laid down under Section
      143(12) of the CA, 2013 and provides that if the auditor of a
      company, in the course of the performance of his duties as auditor,
      has reason to believe that an offence of fraud is being or has been
      committed against the company by officers or employees of the
      company, he shall report the matter to the Central Government.
       However, as per the Companies (Amendment) Act, 2015 as notified
       by MCA vide notification dated 14 December 2015, the auditor shall
       report only those matters to the Central Government which involves
       or is expected to involve individually an amount of INR One Crore or
       above.
Q139: What is the procedure for reporting of frauds of less than rupees
      one crore?
A139: As per Rule 13(3) of Companies (Audit and Auditors) Rules, 2014, in
      case of fraud involving less than one crore rupees, auditor shall
      report the matter to the Audit Committee under Section 177 of the
      CA, 2013 or to the Board immediately within 2 days of his knowledge
      of the fraud and also the same is required to be disclosed in the
      Board's Report.
Q140: What is the procedure for reporting of fraud under CA, 2013?
A140: As per Section 143 (12) of the CA, 2013read with Rule 13 of
      Companies (Audit and Auditors) Rules, 2014, the procedure for
      reporting of fraud if the amount of the fraud is equal or more than 1
      crore, is as follows:
       (i)    auditor shall forward his report to the Board or the Audit
              Committee, as the case may be, immediately after he comes
              to knowledge of the fraud, seeking their reply or observations
              within 45 days;
       (ii)   on receipt of such reply or observations, the auditor shall
              forward his report and the reply or observations of the Board
              or the Audit Committee along with his comments (on such
              reply or observations of the Board or the Audit Committee) to


                                    41
Frequently Asked Questions on The Companies Act, 2013

               the Central Government within 15 days of receipt of such
               reply or observations;
       (iii)   in case the auditor fails to get any reply or observations from
               the Board or the Audit Committee within the stipulated period
               of 45 days, he shall forward his report to the Central
               Government along with a note containing the details of his
               report that was earlier forwarded to the Board or the Audit
               Committee for which he failed to receive any reply or
               observations within the stipulated time;
       (iv)    The report shall be in the form of a statement as specified in
               Form ADT-4 on the letter-head of the auditor containing postal
               address, e-mail address, contact number, Membership
               Number and be signed & sealed by the auditor and same
               shall be sent through Registered Post with AD/speed post
               followed by an e-mail in confirmation to the Secretary, MCA of
               the same.
Q141: Is an auditor required to attend General Meeting?
A141: Yes, as per Section 146 of the CA, 2013, an auditor either by himself
      or through his representative, who is qualified to be an auditor should
      attend the general meeting, unless exempted by the company.




                                     42
                                         Secretarial Audit
Q.142. Who can conduct Secretarial Audit and provide the Report?
A142: Only a member of the Institute of Company Secretaries of India
      holding a certificate of practice (company secretary in practice) can
      conduct Secretarial Audit and furnish the Secretarial Audit Report to
      the company. [Section 204(1) of CA, 2013].
       The Secretarial Audit Report should be signed by the Secretarial
       Auditor who has been engaged by the company to conduct the
       Secretarial Audit and in case of a firm of Company Secretaries, by
       the partner under whose supervision the Secretarial Audit was
       conducted.
Q143: Which companies are required to undergo Secretarial Audit?
A143: As per Section 204(1) of the CA, 2013 read with rule 9 of the
      Companies (Appointment and Remuneration of Managerial
      Personnel) Rules, 2014, the following companies are required to
      obtain Secretarial Audit Report:
       - Every listed company;
       - Every public company having a paid-up share capital of fifty crore
       rupees or more; or
       - Every public company having a turnover of two hundred fifty crore
       rupees or more.
        "Turnover" means the aggregate value of the realisation of amount
       made from the sale, supply or distribution of goods or on account of
       services rendered, or both, by the company during a financial year.
       [Section 2(91)]
Q144: Whether the Secretarial Audit is voluntary or mandatory as per
      the provisions of CA, 2013?
A144: Pursuant to the provisions of Section 204 of the CA 2013, it is
      mandatory for every listed company and company belonging to class
      of companies as prescribed under Question No. 143 to annex with its
      Board's Report, a Secretarial Audit Report given by a Company
      Secretary in Practice.
       In case of companies which are not covered under Section 204 of the
       CA, 2013, it may obtain Secretarial Audit Report voluntarily.
Frequently Asked Questions on The Companies Act, 2013

Q145: What is the format of Secretarial Audit Report?
A145: As per Section 204(1) of the CA, 2013 read with Rule 9 of the
      Companies (Appointment and Remuneration of Managerial
      Personnel) Rules, 2014, Secretarial Audit Report is required to be
      provided in the format prescribed in Form MR-3.
Q146: Is Secretarial Auditor entitled to receive notice of AGM in which
      his report is to be laid before the members?
A146: As per Secretarial Standard 2, the notice in writing of every general
      meeting shall be given to every member of the company as well as to
      the Directors, Auditors and to the Secretarial Auditor and Debenture
      Trustees, if any.
Q147: Is Secretarial Audit applicable to a private company which is a
      subsidiary of a public company?
A147: Yes, as per proviso to Section 2(71) of the CA, 2013, the company
      which is a subsidiary of a company, not being a private company,
      shall be deemed to be a public company for the purposes of this Act,
      even where such subsidiary company continues to be a private
      company in its articles.
       Given the above, Secretarial Audit would be applicable to a private
       company which is a subsidiary of a public company if the prescribed
       criteria of the paid up share capital or turnover is met.
Q148. What are events and actions required to be reported by the
      Secretarial Auditor in the audit report?
 A148: Secretarial Auditor is required to report and provide details of
       specific events and actions occurred during the reporting period
       having major bearing on the affairs of the Company in pursuant to
       above referred laws/ rules and regulations. Few events are also
       given as example in the format of audit report.
Q149: Can a Practicing Company Secretary certify the Annual Return
      with qualification?
A149: A Practicing Company Secretary can certify the Annual Return
      subject to certain reservations/qualifications by way of an annexure to
      his certificate.
Q150: How is the Secretarial Auditor appointed?




                                     44
                                                           Secretarial Audit

A150: As per Rule 8 of the Companies (Meetings of Board and its powers)
      Rules, 2014, Secretarial Auditor is required to be appointed by means
      of resolution passed at a duly convened Board meeting.
Q151: Whether communication to earlier incumbent is required?
A151: Yes, whenever a practicing company secretary is appointed as
      Secretarial Auditor in place of the existing Secretarial Auditor, he/she
      should communicate the appointment to the earlier incumbent in
      writing, in view of the provisions of clause (8) of Part I of the First
      Schedule to the Company Secretaries Act, 1980.




                                     45
                                                           Deposits
Q152: Can a Private Company accept deposit from its members without
      complying with the provisions applicable to deposits?
A152: Yes, as per the exemption Notification No. GSR 464(E) of the MCA
      dated 5th June 2015, a Private Company can accept deposits from its
      members not exceeding 100% of aggregate of its paid up share
      capital and free reserve without complying with the provisions of
      Section 73(2) (a), (b), (c), (d) and (e) of the CA, 2013 and such
      company shall file details of monies so accepted in the manner as
      may be specified.
Q153: What is an "eligible company" for the purpose of deposit?
A153: "Eligible company" refers to every public company having net worth of
      not less than INR 100 crore rupees or a turnover of not less than INR
      500 crore rupees and which has obtained prior consent of
      shareholders in general meeting by means of a special resolution and
      made respective filings with the ROC before making any invitation to
      public.
        In case, deposit is with respect to the specified limits under Section
        180(1)(c) of the CA, 2013, an ordinary resolution may suffice the
        requirement.
Q154. Does Deposit provisions cover debenture?
A154:




 
                                                                         Deposits

                              Debentures



         Secured                                        Unsecured



                                Compulsorily      Issued to Company ­ Not a
  Compulsorily                                    deposit
   Convertible                  Convertible
                                 Debenture        Issued to resident ­ Not a
   Debenture
                                                  deposit if convertible within 10
                                                  years
                                 Optionally
  Optionally        Not a        Convertible
  Convertible                    Debenture        Issued to Company ­ Not a
                    Deposit
  Debenture                                       deposit
                                                  Issued to resident ­ Deposit
                                                  unless listed on stock exchange
                              Non - Convertible   Issued to foreign body ­ Not a
Non - Convertible                Debenture
  Debenture                                       deposit




                                      47
                                                           Dividend
Q155: Will advance towards annual maintenance service for more than
      365 days be treated as a deposit?
A155: Yes, as per the Companies (Acceptance of Deposits) Rules, 2014,
      advance towards annual maintenance service for more than 365 days
      will be treated as a deposit
Q156: Is share application money pending allotment for more than 60
      days treated as a deposit?
A156: Yes, as per the Companies (Acceptance of Deposits) Rules, 2014,
      share application money pending allotment for more than 60 days is
      treated as a deposit.
Q157: In case deposit is taken from a person who is both a director and
      a member of the Company, will such receipt of money be treated
      as deposit or not?
A157: Any amount received from a person who, at the time of the receipt of
      the amount, was a director of the company furnishes to the company
      at the time of giving the money, a declaration in writing to the effect
      that the amount is not being given out of funds acquired by him by
      borrowing or accepting loans or deposits from others, is not
      considered as deposit.
       In case of private company, if the amount is borrowed from its
       member not exceeding 100% of the paid-up share capital and free
       reserves of the company, then it will not be treated as deposits.
       [Notification No. GSR 464E, dated 5th June, 2015]
Q158: Is it mandatory for a company to declare dividend?
A158: No, it is not mandatory for a company to declare dividend.
Q159: In case a company declares dividend, what shall be the last date
      of payment of dividend?
A159: The dividend warrants shall be dispatched by the company-
       (i)    in case of Interim Dividend- within 30 days of declaration of
              dividend in the Board Meeting; and
       (ii)   in case of final dividend- within 30 days of its approval in the
              AGM.


 
                                                                      Dividend

       In case of ECS transfers for distribution of dividend, the transfer shall
       be made within 30 days of declaration of dividend.
Q160: Can a company which has inadequate profits or has incurred
      loss in the immediately preceding financial year declare final
      dividend out of the accumulated profits of the previous financial
      years? Also, is there any restriction on the rate of dividend?
A160: As per the second proviso to Section 123(1) of the CA, 2013, a
      company which has inadequate profit or has incurred loss in the
      immediately preceding financial year may declare dividend out of the
      accumulated profits of the company. However, as per Rule 3 of
      Companies (Declaration and Payment of Dividend) Rules, 2014, the
      rate of dividend shall not exceed the average of the rates at which
      dividend was declared by the company in the immediately preceding
      three financial years.
       If a company has not declared dividend in any of the preceding three
       financial years, the restriction on the rate of dividend would not be
       applicable.
Q161: Can Board of Directors declare final dividend for the financial
      year?
A161: The Board can only recommend the final dividend to the shareholders
      of the Company for declaration at the AGM.
Q162: Can dividend be declared to certain class of shareholders only?
A162: Dividend can be paid to any class of shareholders, but separate
      resolution for declaration of dividend to each class of shares is
      required to be passed at the meeting of the Board or shareholders, as
      the case may be.
Q163: Can dividend be paid to certain shareholders of the same class?
A163: Dividend once declared has to be paid to all the shareholders in a
      particular class.
Q164: Can a shareholder whose shares have been transferred to IEPF
      claim back his shares?
A164: As per proviso to Section 124(6) of the CA, 2013 claimant of shares
      shall be entitled to claim the transferred shares from IEPF and the
      procedure for that would be specified in the IEPF Rules.
Q165: When is unpaid/ unclaimed dividend transferred to Unpaid
      Dividend Account?


                                      49
Frequently Asked Questions on The Companies Act, 2013

A165: As per Section 124(1) of the CA, 2013, dividend declared by the
      company which remains unpaid/ unclaimed for a period of 30 days
      from the date of declaration shall be transferred to Unpaid Dividend
      Account within 7 days from the date of expiry of the said period of 30
      days.




                                    50
           Corporate Social Responsibility
Q166: Whether provisions governing CSR are applicable to private
      Companies?
A166: Yes, every company irrespective of Private or Public Limited or a
      foreign company having its branch office or project office in India
      having:
       ·       net worth of INR 500 crores or more
       ·       turnover of INR 1000 crores or more
       ·       net profit of INR 5 crores or more
       shall formulate a CSR Committee, who shall determine the CSR
       policy of the company and every such company is required to spend
       of 2% of average net profits of the company for last 3 years towards
       CSR.
Q167: In which activities can a company contribute towards CSR?
A167: The amount allocated for CSR can be spent for activities specified
      under Schedule VII of the CA, 2013.
Q168: Are there any implications of not spending the 2% of average net
      profits as CSR expenditure?
168:   In case of any shortfall of not spending the 2% of average net profits,
       the Board is required to be disclosed the same in the Board report
       along with reasons thereof.




 
          Compromise and Arrangements
Q169: What are the applicable provisions for carrying out Compromise
      and arrangements?
A169: Compromise and Arrangement between company and its creditors or
      company and its members shall be done in accordance with the
      provisions of the CA, 2013.
       (MCA vide notification dated 7 December 2016 notified the Section
       230 to 240 of the CA, 2013 which deal with Compromise and
       Arrangements)
Q170: Who are eligible to raise objections to the scheme of
      compromise and arrangement?
A170: As per the proviso to Section 230(4) of the CA, 2013, objection can
      be raised only by persons holding 10% or more of shareholding or
      having debt amounting 5% of the total outstanding debt as per the
      latest audited financial statement.
Q171: How do we calculate the `shareholding' and `outstanding debt'
      while ascertaining the eligibility to object to the scheme?
A171: As per Explanation to Rule 9 of the Companies (Compromise,
      Arrangements and Amalgamations) Rules, 2016:
       `Shareholding' means the shareholding of the members of the class
       who are entitled to vote on the proposal and
       `Outstanding debt' shall mean all debt owed by the company to the
       respective class or classes of creditors that remains outstanding as
       per the latest audited financial statement, or if such statement is more
       than six months old, as per provisional financial statement not
       preceding the date of application by more than six months.
Q172: What is Corporate Debt Restructuring?
A172: As per explanation to the rule 4 of the Companies (Compromises,
      Arrangements and Amalgamations) Rules, 2016, corporate debt
      restructuring means a scheme that restructures or varies the debt
      obligations of a company towards its creditors.
Q173: Under what circumstances the meeting of the creditors may be
      dispensed by the NCLT?



 
                                           Compromise and Arrangements

A173: As per Section 230(9) of the CA, 2013, if 90% of the creditors in
      value agree and confirm to the scheme by way of affidavit, NCLT may
      dispense the holding of meeting of creditors or class of creditors.
Q174: Do we have to comply with Section 230 and Section 232 while
      carrying out the merger and amalgamation of two or more small
      companies or between holding and wholly owned subsidiary
      companies?
A174: No, Section 233 of the CA, 2013 prescribes to regulate the merger
      and amalgamation between two or more small companies or between
      holding and wholly owned subsidiary companies. The powers with
      regard to the same have been delegated to the Regional Director.
Q175: For how many years the books and papers of amalgamated
      companies shall be preserved?
A175: The CA, 2013 does not prescribe any period for preservation of books
      and papers. However, books and papers of amalgamated companies
      shall not be destroyed without the approval of the Central
      Government.
Q176: What happens in case of merger of listed transferor company
      into unlisted transferee company?
A176: As per Section 232(3)(h) of CA, 2013, where the transferor company
      is a listed company and the transferee company is an unlisted
      company, then:
(i)    the transferee company shall remain an unlisted company until it
       becomes a listed company.
(ii)   If shareholders of the transferor company decide to opt out of the
       transferee company, provision shall be made for payment of the value
       of shares held by them and other benefits n accordance with a pre-
       determined price formula or after valuation is made and the
       arrangements may be made by the NCLT.
Q177: Can Company buy back its shares under a scheme of
      arrangement without following the conditions prescribed under
      Section 68 of the CA, 2013?
A177: No, as per Section 230(10) of the CA, 2013, NCLT shall not approve
      any scheme of compromise or arrangement in respect of buy-back of
      securities which is not in compliance with the provisions of Section 68
      of the CA, 2013.



                                     53
                                                Annexure "A"

      List of Sections of Companies Act 2013 that has been notified and
    enforced by the Ministry of Corporate Affairs as on 30th January, 2017
Chapters                  Sections Notified
Chapter 1                 Section 1- Short title, extent, commencement
Preliminary                             and application
                          (Notified on 12th September, 2013)
                          Definitions
                          Section 2 (1)- Abridged prospectus
                                        (Notified on 12th September, 2013)
                          Section 2 (2)- Accounting Standards
                                        (Notified on 1st April, 2014)
                          Section 2 (3)- Alter" or "Alteration
                                        (Notified on 12th September, 2013)
                          Section 2 (4)- Appellate Tribunal
                                         (Notified on 12th September, 2013)
                          Section 2 (5)- Articles
                                        (Notified on 12th September, 2013)
                          Section 2 (6)- Associate company
                                        (Notified on 12th September, 2013)
                          Section 2 (7)- Auditing Standards
                                        (Notified on 1st April,2014)
                          Section 2 (8)- Authorised capital
                                        (Notified on 12th September, 2013)
                          Section 2 (9)- Banking company
                                        (Notified on 12th September, 2013)
                          Section 2 (10)- Board of Directors "Board"
                                        (Notified on 12th September, 2013)
                          Section 2 (11)- Body Corporate or Corporation
                                        (Notified on 12th September, 2013)
                          Section 2 (12)- Book and Paper and Book or Paper

 
                                      Annexure-1

              (Notified on 12th September, 2013)
Section 2 (13)- Books of Account
              (Notified on 1st April, 2014)
Section 2 (14)- Branch Office
              (Notified on 12th September, 2013)
Section 2 (15)- Called up Capital
             (Notified on 12th September, 2013)
Section 2 (16)- Charge
(Notified on 12th September, 2013)
Section 2 (17)- Chartered Accountant
              (Notified on 12th September, 2013)
Section 2 (18)- Chief Executive Officer
             (Notified on 12th September, 2013)
Section 2 (19)- Chief Financial Officer
             (Notified on 12th September, 2013)
Section 2 (20)- Company
             (Notified on 12th September, 2013)
Section 2 (21)- Company limited by Guarantee
             (Notified on 12th September, 2013)
Section 2 (22)- Company limited by shares
             (Notified on 12th September, 2013)
Section 2 (23)- Company Liquidator
              (Notified on 15th December, 2016)
Section 2 (24)- "Company Secretary" or "Secretary"
              (Notified on 12th September, 2013)
Section 2 (25)- Company Secretary in Practice
              (Notified on 12th September, 2013)
Section 2 (26)- Contributory
              (Notified on 12th September, 2013)
Section 2 (27)- Control
              (Notified on 12th September, 2013)
Section 2 (28)- Cost Accountant
              (Notified on 12th September, 2013)
Section 2 (29)- Court
              (Notified on 12th September, 2013)







           55
Frequently Asked Questions on The Companies Act, 2013

                     Section 2 (30)- Debenture
                                   (Notified on 12th September, 2013)
                     Section 2 (31)- Deposit
                                   (Notified on 1st April, 2014)
                     Section 2 (32)- Depository
                                   (Notified on 12th September, 2013)
                     Section 2 (33)- Derivative
                                   (Notified on 12th September, 2013)
                     Section 2 (34)- Director
                                   (Notified on 12th September, 2013)
                     Section 2 (35)- Dividend
                                   (Notified on 12th September, 2013)
                     Section 2 (36)- Document
                                   (Notified on 12th September, 2013)
                     Section 2 (37)- Employees' Stock Option
                                   (Notified on 12th September, 2013)
                     Section 2 (38)- Expert
                                   (Notified on 12th September, 2013)
                     Section 2 (39)- Financial Institution
                                   (Notified on 12th September, 2013)
                     Section 2 (40)- Financial Statement
                                   (Notified on 12th September, 2013)
                     Section 2 (41)- Financial Year (Except 1st proviso)
                                   (Notified on 1st April, 2014)
                     Section 2 (42)- Foreign Company
                                   (Notified on 1st April, 2014)
                     Section 2 (43)- Free Reserves
                                   (Notified on 12th September, 2013)
                     Section 2 (44)- Global Depository Receipt
                                   (Notified on 12th September, 2013)
                     Section 2 (45)- Government company
                                   (Notified on 12th September, 2013)
                     Section 2 (46)- Holding Company
                                   (Notified on 12th September, 2013)
                     Section 2 (47)- Independent Director


                                 56
                                       Annexure-1

              (Notified on 1st April, 2014)
Section 2 (48)- Indian Depository Receipt
              (Notified on 1st April, 2014)
Section 2 (49)- Interested Director
              (Notified on 12th September, 2013)
Section 2 (50)- Issued Capital
              (Notified on 12th September, 2013)
Section 2 (51)- Key Managerial Personnel
              (Notified on 12th September, 2013)
Section 2 (52)- Listed Company
              (Notified on 12th September, 2013)
Section 2 (53)- Manager
              (Notified on 12th September, 2013)
Section 2 (54)- Managing Director
              (Notified on 12th September, 2013)
Section 2 (55)- Member
              (Notified on 12th September, 2013)
Section 2 (56)- Memorandum
              (Notified on 12th September, 2013)
Section 2 (57)- Net Worth (modified)-
              (Notified on 12th September, 2013)
Section 2 (58)- Notification
              (Notified on 12th September, 2013)
Section 2 (59)- Officer
              (Notified on 12th September, 2013)
Section 2 (60)- Officer who is in default
              (Notified on 12th September, 2013)
Section 2 (61)- Official Liquidator
              (Notified on 12th September, 2013)
Section 2 (62)- One Person Company
              (Notified on 1st April, 2014)
Section 2 (63)- Ordinary or Special Resolution
              (Notified on 12th September, 2013)
Section 2 (64)- Paid- up Share Capital
              (Notified on 12th September, 2013)


            57
Frequently Asked Questions on The Companies Act, 2013

                     Section 2 (65)- Postal Ballot
                                   (Notified on 12th September, 2013)
                     Section 2 (66)- Prescribed
                                   (Notified on 12th September, 2013)
                     Section 2 (67)- Previous Company Law (Except Sub
                                  clause (ix))
                                   (Notified on 12th September, 2013)
                     Section 2 (68)- Private Company
                                   (Notified on 12th September, 2013)
                     Section 2 (69)- Promoter
                                   (Notified on 12th September, 2013)
                     Section 2 (70)- Prospectus
                                   (Notified on 12th September, 2013)
                     Section 2 (71)- Public Company
                                   (Notified on 12th September, 2013)
                     Section 2 (72)- Public Financial Institution
                                   (Notified on 12th September, 2013)
                     Section 2 (73)- Recognised Stock Exchange
                                   (Notified on 12th September, 2013)
                     Section 2 (74)- Register of Companies
                                   (Notified on 12th September, 2013)
                     Section 2 (75)- Registrar
                                   (Notified on 12th September, 2013)
                     Section 2 (76)- Related Party
                                   (Notified on 12th September, 2013)
                     Section 2 (77)- Relative
                                   (Notified on 12th September, 2013)
                     Section 2 (78)- Remuneration
                                   (Notified on 12th September, 2013)
                     Section 2 (79)- Schedule
                                   (Notified on 12th September, 2013)
                     Section 2 (80)- Scheduled Bank
                                   (Notified on 12th September, 2013)
                     Section 2 (81)- Securities
                                   (Notified on 12th September, 2013)
                     Section 2 (82)- Securities and Exchange Board

                                58
                                      Annexure-1

              (Notified on 12th September, 2013)
Section 2 (83)- Serious Fraud Investigation Office
              (Notified on 1st April, 2014)
Section 2 (84)- Share
              (Notified on 12th September, 2013)
Section 2 (85)- Small company
              (Notified on 1st April, 2014)
Section 2 (86)- Subscribed Capital
              (Notified on 12th September, 2013)
Section 2 (87)- Subsidiary Company (Except the
             proviso)
              (Notified on 12th September, 2013)
              (Proviso Notified on 1st April, 2014)
Section 2 (88)- Sweat Equity Shares
              (Notified on 12th September, 2013)
Section 2 (89)- Total Voting Power
              (Notified on 12th September, 2013)
Section 2 (90)- Tribunal
              (Notified on 12th September, 2013)
Section 2 (91)- Turnover
              (Notified on 12th September, 2013)
Section 2 (92)- Unlimited Company
              (Notified on 12th September, 2013)
Section 2 (93)- Voting right
              (Notified on 12th September, 2013)
Section 2 (94)- Whole Time Director
              (Notified on 12th September, 2013)
Section 2 (95)- words and expressions used and
             not defined in this Act but defined in
             the Securities Contracts (Regulation)
             Act, 1956 or the Securities and
             Exchange Board of India Act, 1992 or
             the Depositories Act, 1996 shall have
             the meanings respectively assigned to
             them in those Acts.
              (Notified on 12th September, 2013)


           59
Frequently Asked Questions on The Companies Act, 2013

Chapter II ­          Section 3- Formation of company
Incorporation of               (Notified on 1st April, 2014)
Company and Matters   Section 4- Memorandum
Incidental Thereto              (Notified on 1st April, 2014)
(3-22)                Section 5- Articles
                                (Notified on 1st April, 2014)
                      Section 6- Act to override memorandum, articles,
                               etc.
                                (Notified on 1st April, 2014)
                      Section 7- Incorporation of company
                                (sub-section (7) notified on 1st June,
                               2016)
                      Section 8- Formation of companies with charitable
                               objects, etc.
                      Sub-section (9) notified on 15th December, 2016
                      Section 9- Effect of registration
                               (Notified on 1st April, 2014)
                      Section 10- Effect of memorandum and articles
                                (Notified on 1st April, 2014)
                      Section 11- Commencement of business, etc
                      Section 12- Registered office of company
                                (Notified on 1st April, 2014)
                      Section 13- Alteration of memorandum
                                (Notified on 1st April, 2014)
                      Section 14- Alteration of articles
                               (second proviso to sub-section (1) and
                               sub-section (2) notified on 1st June, 2016)
                      Section 15- Alteration of memorandum or articles to
                               be noted in every copy
                                (Notified on 1st April, 2014)
                      Section 16- Rectification of name of company
                                (Notified on 1st April, 2014)
                      Section 17- Copies of memorandum, articles, etc.,
                               to be given to members
                               (Notified on 1st April, 2014)
                      Section 18- Conversion of companies already


                                  60
                                                                  Annexure-1

                                   registered
                                    (Notified on 1st April, 2014)
                          Section 19- Subsidiary company not to hold shares
                                   in its holding company
                                    (Notified on 12th September, 2013)
                          Section 20- Service of documents
                                    (Notified on 1st April, 2014)
                          Section 21- Authentication of documents,
                                   proceedings and contracts
                                    (Notified on 12th September, 2013)
                          Section 22- Execution of Acts of exchange, etc.
                                    (Notified on 12th September, 2013)
Chapter III ­             Section 23- Public offer and private placement
Prospectus and                     (Notified on 1st April,2014)
Allotment of Securities             [Except clause (b) of sub-section (1) and
(23-42)                            subsection (2)]
                                    (Notified on 12th September, 2013)
                                   [23(1)(6) & (2]
                          Section 24- Power of Securities and Exchange
                                   Board to regulate issue and transfer of
                                   securities, etc.
                                    (Notified on 12th September, 2013)
                          Section 25- Document containing offer of securities
                                   for sale to be deemed prospectus [Except
                                   clause 3]
                                    (Notified on 12th September, 2013)
                          Section 26- Matters to be stated in prospectus
                                    (Notified on 1st April,2014)
                          Section 27- Variation in terms of contract or objects
                                   in prospectus
                                    (Notified on 1st April,2014)
                          Section 28- Offer of sale of shares by certain
                                   members of company
                                    (Notified on 1st April,2014)
                          Section 29- Public offer of securities to be in
                                   dematerialised form.
                                    (Notified on 12th September, 2013)

                                      61
Frequently Asked Questions on The Companies Act, 2013

                     Section 30- Advertisement of prospectus.
                               (Notified on 12th September, 2013)
                     Section 31- Shelf prospectus
                               (Notified on 12th September, 2013)
                     Section 32- Red herring prospectus.
                               (Notified on 12th September, 2013)
                     Section 33- Issue of application forms for securities
                               [Except sub section 3] (Notified on 12th
                              September, 2013)
                               [sub section 3] (Notified on 1st April, 2014)
                     Section 34- Criminal liability for mis-statements in
                              prospectus.
                               (Notified on 12th September, 2013)
                     Section 35- Civil liability for mis-statements in
                              prospectus
                               (Notified on 12th September, 2013)
                               [Clause (e) of sub-section 1](Notified on
                              1st April, 2014)
                     Section 36- Punishment for fraudulently inducing
                              persons to invest money
                               (Notified on 12th September, 2013)
                     Section 37- Action by affected persons
                               (Notified on 12th September, 2013)
                     Section 38- Punishment for personation for
                              acquisition, etc., of securities
                               (Notified on 12th September, 2013)
                     Section 39- Allotment of securities by company
                               (Notified on 12th September, 2013)
                               [Clause 4] (Notified on 1st April, 2014)
                     Section 40- Securities to be dealt with in stock
                              exchanges
                               (Notified on 12th September, 2013)
                               [clause 6 (Notified on 1st April, 2014)]
                     Section 41- Global depository receipt
                               (Notified on 1st April, 2014)
                     PART II.--Private placement
                     Section 42- Offer or invitation for subscription of

                                 62
                                                          Annexure-1

                            securities on private placement
                             (Notified on 1st April, 2014)
Chapter IV ­        Section 43- Kinds of share capital
Share Capital and            (Notified on 1st April, 2014)
Debentures          Section 44- Nature of shares or debentures
(43 - 72)                     (Notified on 12th September, 2013)
                    Section 45- Numbering of shares
                              (Notified on 12th September, 2013)
                    Section 46- Certificate of shares
                              (Notified on 1st April, 2014)
                    Section 47- Voting rights
                              (Notified on 1st April, 2014)
                    Section 48- Variation of shareholders' rights.
                              (Notified on 15th December, 2016)
                    Section 49- Calls on shares of same class to be
                             made on uniform basis.
                              (Notified on 12th September, 2013)
                    Section 50- Company to accept unpaid share
                             capital, although not called up.
                              (Notified on 12th September, 2013)
                    Section 51- Payment of dividend in proportion to
                             amount paid-up.
                              (Notified on 12th September, 2013)
                    Section 52- Application of premiums received on
                             issue of shares.
                              (Notified on 1st April, 2014)
                    Section 53- Prohibition on issue of shares at
                             discount.
                              (Notified on 1st April, 2014)
                    Section 54- Issue of sweat equity shares.
                              (Notified on 1st April, 2014)
                    Section 55- Issue and redemption of preference
                             shares
                              (Sub-section (3) notified on 1st June,
                             2016)
                    Section 56- Transfer and transmission of securities


                               63
Frequently Asked Questions on The Companies Act, 2013

                               (Notified on 1st April, 2014)
                     Section 57- Punishment for personation of
                              shareholder
                               (Notified on 12th September, 2013)
                     Section 58- Refusal of registration and appeal
                              against refusal
                               (Notified on 12th September, 2013)
                     Section 59- Rectification of register of members
                               (Notified on 12th September, 2013)
                     Section 60- Publication of authorised, subscribed
                              and paid-up capital
                               (Notified on 12th September, 2013)
                     Section 61- Power of limited company to alter its
                              share capital
                               (Proviso to clause (b) of sub-section (1)
                              notified on 1st June, 2016)
                     Section 62- Further issue of share capital
                               (Sub-sections (4) to (6) notified on 1st
                              June, 2016)
                     Section 63- Issue of bonus shares
                               (Notified on 1st April, 2014)
                     Section 64- Notice to be given to Registrar for
                              alteration of share capital
                               (Notified on 1st April, 2014)
                     Section 65- Unlimited company to provide for
                              reserve share capital on re-registration.
                               (Notified on 12th September, 2013)
                     Section 66- Reduction of Share Capital
                               (Notified on 15th December, 2016)
                     Section 67- Restrictions on purchase by company
                              or giving of loans by it for purchase of its
                              shares.
                               (Notified on 1st April, 2014)
                     Section 68- Power of company to purchase its own
                              securities
                               (Notified on 1st April, 2014)
                     Section 69- Transfer of certain sums to capital


                                 64
                                                          Annexure-1

                           redemption reserve account
                            (Notified on 12th September, 2013)
                  Section 70- Prohibition for buy-back in certain
                           circumstances
                            (Notified on 12th September, 2013)
                            [Sub section 2 Notified on 1st April, 2014]
                  Section 71- Debentures
                            (Notified on 1st April, 2014)
                            (Sub-sections (9) to (11) notified on 1st
                           June, 2016)
                  Section 72- Power to nominate
                            (Notified on 1st April, 2014)
CHAPTER V         Section 73- Prohibition on acceptance of deposits
Acceptance of              from public.
Deposits by       (Notified on 1st April, 2014)
Companies         Section 74- Repayment of deposits, etc., accepted
(73 - 76)                  before commencement of this Act.
                  (Notified on 1st April, 2014)
                  Section 75- Damages for fraud
                  (Notified on 1st June, 2016)
                  Section 76- Acceptance of deposits from public by
                           certain companies
                  (Notified on 1st April, 2014)
                  Section 76A- Punishment for contravention of
                           section 73 or 76
                  (Notified on 29th May, 2015)
Chapter VI ­      Section 77- Duty to register charges, etc.
Registration of   (Notified on 1st April, 2014)
Charges           Section 78- Application for registration of charge.
(77 - 87)         (Notified on 1st April, 2014)
                  Section 79- Section 77 to apply in certain matters.
                  (Notified on 1st April, 2014)
                  Section 80- Date of notice of charge.
                  (Notified on 1st April, 2014)
                  Section 81- Register of charges to be kept by
                           Registrar.


                              65
Frequently Asked Questions on The Companies Act, 2013

                     (Notified on 1st April, 2014)
                     Section 82- Company to report satisfaction of
                              charge.
                     (Notified on 1st April, 2014)
                     Section 83- Power of Registrar to make entries of
                              satisfaction and release in absence of
                              intimation from company.
                     (Notified on 1st April, 2014)
                     Section 84- Intimation of appointment of receiver or
                              manager.
                     (Notified on 1st April, 2014)
                     Section 85- Company's register of charges.
                     (Notified on 1st April, 2014)
                     Section 86- Punishment for contravention.
                     (Notified on 12th September, 2013)
                     Section 87- Rectification by Central Government in
                              register of charges.
                     (Notified on 1st April, 2014)
Chapter VII ­        Section 88- Register of members, etc.
Management and       (Notified on 1st April, 2014)
Administration       Section 89- Declaration in respect of beneficial
(88 - 122)                    interest in any share.
                     (Notified on 1st April, 2014)
                     Section 90- Investigation of beneficial ownership of
                              shares in certain cases.
                     (Notified on 1st April, 2014)
                     Section 91- Power to close register of members or
                              debenture holders or other security
                              holders.
                     (Notified on 12th September, 2013)
                     Section 92- Annual return.
                     (Notified on 1st April, 2014)
                     Section 93- Return to be filed with Registrar in case
                              promoters' stake changes.
                     (Notified on 1st April, 2014)
                     Section 94- Place of keeping and inspection of
                              registers, returns, etc.

                                 66
                                       Annexure-1

(Notified on 1st April, 2014)
Section 95- Registers, etc., to be evidence.
(Notified on 1st April, 2014)
Section 96- Annual general meeting.
(Notified on 1st April, 2014)
Section 97- Power of Tribunal to call annual general
         meeting.
(Notified on 1st June, 2016)
Section 98- Power of Tribunal to call meetings of
         members, etc.
(Notified on 1st June, 2016)
Section 99- Punishment for default in complying
         with provisions of sections 96 to 98.
(Notified on 1st June, 2016)
Section 100- Calling of extraordinary general
         meeting.
(Notified on 12th September, 2013)
[Clause 100(6) Notified on 1st April, 2014]
Section 101- Notice of meeting
(Notified on 1st April, 2014)
Section 102- Statement to be annexed to notice
(Notified on 12th September, 2013)
Section 103- Quorum for meetings
(Notified on 12th September, 2013)
Section 104- Chairman of meetings
(Notified on 12th September, 2013)
Section 105- Proxies
(Notified on 12th September, 2013)
[105(1), Third and fourth proviso and 105(7)
         Notified on 1st April, 2014]
Section 106- Restriction on voting rights.
(Notified on 12th September, 2013)
Section 107- Voting by show of hands.
(Notified on 12th September, 2013)
Section 108- Voting through electronic means.
(Notified on 1st April, 2014)


            67
Frequently Asked Questions on The Companies Act, 2013

                     Section 109- Demand for poll.
                     (Notified on 1st April, 2014)
                     Section 110- Postal ballot.
                     (Notified on 1st April, 2014)
                     Section 111- Circulation of members' resolution.
                     (Notified on 12th September, 2013)
                     Section 112- Representation of President and
                              Governors in meetings.
                     (Notified on 12th September, 2013)
                     Section 113- Representation of corporations at
                              meeting of
                     companies and of creditors.
                     (Notified on 12th September, 2013)
                     [Except 113(1)(6) Notified on 1st April, 2014]
                     Section 114- Ordinary and special resolutions.
                     (Notified on 12th September, 2013)
                     Section 115- Resolutions requiring special notice.
                     (Notified on 1st April, 2014)
                     Section 116- Resolutions passed at adjourned
                              meeting (Notified on 12th September,
                              2013)
                     Section 117- Resolutions and agreements to be
                              filed
                     (Notified on 1st April, 2014)
                     Section 118- Minutes of proceedings of general
                              meeting, meeting of Board of Directors
                              and other meeting and resolutions passed
                              by postal ballot.
                     (Notified on 1st April, 2014)
                     Section 119- Inspection of minute-books of general
                              meeting (Notified on 1st April, 2014)
                     (Sub-section (4) notified on 1st June, 2016)
                     Section 120- Maintenance and inspection of
                              documents in electronic form.
                     (Notified on 1st April, 2014)
                     Section 121- Report on annual general meeting.
                     (Notified on 1st April, 2014)

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                                                             Annexure-1

                      Section 122- Applicability of this Chapter to One
                               Person Company
                      (Notified on 1st April, 2014)
Chapter VIII ­        Section 123- Declaration of dividend.
Declaration and       (Notified on 1st April, 2014)
Payment of Dividend   Section 124- Unpaid Dividend Account
(123 - 127)           (Notified on 5th September, 2016)
                      Section 125- Commencement of sub- section 1, 2,
                               3, 4 and 6 (with respect to the manner of
                               administration of the Investor Education
                               and Protection Fund] and 8, 9, 10 and 11
                               of Investor Education and Protection Fund
                               from 5th September, 2016.
                      Commencement of sub- section 5, 6 and 7 of
                               Investor Education and Protection Fund
                               from 13th January, 2016. (Sub-section (5),
                               sub-section (6) [except with respect to the
                               manner of administration of the Investor
                               Education and Protection Fund]
                      Section 126- Right to dividend, rights shares and
                               bonus shares to be held in abeyance
                               pending registration of transfer of shares.
                      (Notified on 1st April, 2014)
                      Section 127- Punishment for failure to distribute
                               dividends
                      (Notified on 12th September,2013)
Chapter IX ­          Section 128- Books of account, etc., to be kept by
Accounts of                    company.
Companies             (Notified on 1st April, 2014)
(128 - 138)           Section 129- Financial statement.
                      (Notified on 1st April, 2014)
                      Section 130- Re-opening of accounts on court's or
                               Tribunal's orders.
                      (Notified on 1st June, 2016)
                      Section 131- Voluntary revision of financial
                               statements or Board's report.
                      (Notified on 1st June, 2016)
                      Section 133- Central Government to prescribe

                                  69
Frequently Asked Questions on The Companies Act, 2013

                              accounting standards.
                     (Notified on 12th September, 2013)
                     Section 134- Financial Statement, Board Report,
                              etc
                     (Notified on 1st April, 2014)
                     Section 135- Corporate Social Responsibility.
                     (Notified on 1st April, 2014)
                     Section 136- Right of member to copies of audited
                              financial statement
                     (Notified on 1st April, 2014)
                     Section 137- Copy of financial statement to be filed
                              with Registrar
                     (Notified on 1st April, 2014)
                     Section 138- Internal Audit
                     (Notified on 1st April, 2014)
Chapter X ­          Section 139- Appointment of auditors.
Audit and Auditors   (Notified on 1st April, 2014)
(139 - 148)          Section 140- Removal, resignation of auditor and
                              giving of special notice
                     (Notified on 1st April, 2014)
                     (Second proviso to sub-section (4)) and (Sub-
                              section (5) notified on 1st June, 2016)
                     Section 141- Eligibility, qualifications and
                              disqualifications of auditors.
                     (Notified on 1st April, 2014)
                     Section 142- Remuneration of auditors.
                     (Notified on 1st April, 2014)
                     Section 143- Powers and duties of auditors and
                              auditing standards.
                     (Notified on 1st April, 2014)
                     Section 144- Auditor not to render certain services.
                     (Notified on 1st April, 2014)
                     Section 145- Auditors to sign audit reports, etc.
                     (Notified on 1st April, 2014)
                     Section 146- Auditors to attend general meeting.
                     (Notified on 1st April, 2014)


                                 70
                                                          Annexure-1

                    Section 147- Punishment for contravention.
                    (Notified on 1st April, 2014)
                    Section 148- Central Government to specify audit of
                             items of cost in respect of certain
                             companies
                    (Notified on 1st April, 2014)
Chapter XI ­        Section 149- Company to have Board of Directors.
Appointment and     (Notified on 1st April, 2014)
Qualifications of   Section 150- Manner of selection of independent
Directors                    directors and maintenance of data bank of
(149 - 172)                  independent directors.
                    (Notified on 1st April, 2014)
                    Section 151- Appointment of director elected by
                             small shareholders.
                    (Notified on 1st April, 2014)
                    Section 152- Appointment of directors.
                    (Notified on 1st April, 2014)
                    Section 153- Application for allotment of Director
                             Identification Number.
                    (Notified on 1st April, 2014)
                    Section 154- Allotment of Director Identification
                             Number.
                    (Notified on 1st April, 2014)
                    Section 155- Prohibition to obtain more than one
                             Director Identification Number.
                    (Notified on 1st April, 2014)
                    Section 156- Director to intimate Director
                             Identification Number. (Notified on 1st
                             April, 2014)
                    Section 157- Company to inform Director
                             Identification Number to Registrar.
                    (Notified on 1st April, 2014)
                    Section 158- Obligation to indicate Director
                             Identification Number.
                    (Notified on 1st April, 2014)
                    Section 159- Punishment for contravention.
                    (Notified on 1st April, 2014)


                               71
Frequently Asked Questions on The Companies Act, 2013

                     Section 160- Right of persons other than retiring
                              directors to stand for directorship.
                     (Notified on 1st April, 2014)
                     Section 161- Appointment of additional director,
                              alternate director and nominee director.
                     (Notified on 12th September, 2013)
                     [Except 161(2) (Notified on 1st April, 2014)]
                     Section 162- Appointment of directors to be voted
                              individually. (Notified on 12th September,
                              2013)
                     Section 163- Option to adopt principle of
                              proportional         representation      for
                              appointment of directors. (Notified on 12th
                              September, 2013)
                     Section 164- Disqualifications for appointment of
                              director.
                     (Notified on 1st April, 2014)
                     Section 165- Number of directorships.
                     (Notified on 1st April, 2014)
                     Section 166- Duties of directors.
                     (Notified on 1st April, 2014)
                     Section 167- Vacation of office of director.
                     (Notified on 1st April, 2014)
                     Section 168- Resignation of director
                     (Notified on 1st April, 2014)
                     Section 169- Removal of directors
                     (Notified on 1st April, 2014)
                     (Sub-section (4) notified on 1st June, 2016)
                     Section 170- Register of directors and key
                              managerial       personnel      and    their
                              shareholding.
                     (Notified on 1st April, 2014)
                     Section 171- Members' right to inspect.
                     (Notified on 1st April, 2014)
                     Section 172- Punishment
                     (Notified on 1st April, 2014)
Chapter XII ­        Section 173- Meetings of Board.

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                                                           Annexure-1

Meetings of Board   (Notified on 1st April, 2014)
and its Powers      Section 174- Quorum for meetings of Board.
(173 - 195)         (Notified on 1st April, 2014)
                    Section 175- Passing of resolution by circulation.
                    (Notified on 1st April, 2014)
                    Section 176- Defects in appointment of directors not
                             to invalidate actions taken.
                    (Notified on 12th September, 2013)
                    Section 177- Audit committee.
                    (Notified on 1st April, 2014)
                    Section 178- Nomination and remuneration
                             committee and stakeholders relationship
                             committee.
                    (Notified on 1st April, 2014)
                    Section 179- Powers of Board.
                    (Notified on 1st April, 2014)
                    Section 180- Restrictions on powers of Board.
                    (Notified on 12th September, 2013)
                    Section 181- Company to contribute to bona fide
                             and charitable funds, etc.
                    (Notified on 12th September, 2013)
                    Section 182- Prohibitions and restrictions regarding
                             political contributions.
                    (Notified on 12th September, 2013)
                    Section 183- Power of Board and other persons to
                             make contributions to national defence
                             fund, etc. (Notified on 12th September,
                             2013)
                    Section 184- Disclosure of interest by director.
                    (Notified on 1st April, 2014)
                    Section 185- Loan to directors, etc.
                    (Notified on 12th September, 2013)
                    Section 186- Loan and investment by company.
                    (Notified on 1st April, 2014)
                    Section 187- Investments of company to be held in
                             its own name.
                    (Notified on 1st April, 2014)

                                73
Frequently Asked Questions on The Companies Act, 2013

                       Section 188- Related party transactions.
                       (Notified on 1st April, 2014)

                       Section 189- Register of contracts or arrangements
                                in which directors are interested.
                       (Notified on 1st April, 2014)
                       Section 190- Contract of employment with
                                managing or whole-time directors.
                       (Notified on 1st April, 2014)
                       Section 191- Payment to director for loss of office,
                                etc., in connection with transfer of
                                undertaking, property or shares.
                       (Notified on 1st April, 2014)
                       Section 192- Restriction on non-cash transactions
                                involving directors.
                       (Notified on 12th September, 2013)
                       Section 193- Contract by One Person Company.
                       (Notified on 1st April, 2014)
                       Section 194- Prohibition on forward dealings in
                                securities of company by key managerial
                                personnel.
                       (Notified on 12th September, 2013)
                       Section 195- Prohibition on insider trading of
                                securities. (Notified on 12th September,
                                2013)
Chapter XIII ­         Section 196- Appointment of managing director,
Appointment and                 whole-time director or manager.
Remuneration of        (Notified on 1st April, 2014)
Managerial Personnel   Section 197- Overall maximum managerial
(196 - 205)                     remuneration         and          managerial
                                remuneration in case of absence or
                                inadequacy of profits.
                       (Notified on 1st April, 2014)
                       Section 198- Calculation of profits.
                       (Notified on 1st April, 2014)
                       Section 199- Recovery of remuneration in certain
                                cases. (Notified on 1st April, 2014)


                                   74
                                                             Annexure-1

                      Section 200- Central Government or company to fix
                               limit with regard to remuneration.
                      (Notified on 1st April, 2014)
                      Section 201- Forms of, and procedure in relation to,
                               certain applications.
                      (Notified on 1st April, 2014)
                      Section 202- Compensation for loss of office of
                               managing or whole-time director or
                               manager.
                      (Notified on 12th September, 2013)
                      Section 203- Appointment of key managerial
                               personnel.
                      (Notified on 1st April, 2014)
                      Section 204- Secretarial audit for bigger companies.
                      (Notified on 1st April, 2014)
                      Section 205- Functions of company secretary.
                      (Notified on 1st April, 2014)
CHAPTER XIV           Section 206- Power to call for information, inspect
Inspection, Inquiry            books and conduct inquiries.
and Investigation     (Notified on 1st April, 2014)
(206 - 229)           Section 207- Conduct of inspection and inquiry.
                      (Notified on 1st April, 2014)
                      Section 208- Report on inspection made.
                      (Notified on 1st April, 2014)
                      Section 209- Search and seizure.
                      (Notified on 1st April, 2014)
                      Section 210- Investigation into affairs of company.
                      (Notified on 1st April, 2014)
                      Section 211- Establishment of Serious Fraud
                               Investigation Office.
                      (Notified on 1st April, 2014)
                      Section 212- Investigation into affairs of company
                               by Serious Fraud Investigation Office.
                               (except references of sub-section (10) of
                               section 66, sub-section (5) of section 140,
                               section 213, sub-section (1) of section 251
                               and sub-section (3) of section 339 made in


                                  75
Frequently Asked Questions on The Companies Act, 2013

                              sub-section (6) and also sub-sections (8)
                              to (10))
                     (Notified on 1st April, 2014)
                     Section 213- Investigation into company's affairs in
                              other cases.
                     (Notified on 1st June, 2016)
                     Section 214- Security for payment of costs and
                              expenses of investigation.
                     (Notified on 1st April, 2014)
                     Section 215- Firm, body corporate or association
                              not to be appointed as inspector.
                     (Notified on 1st April, 2014)
                     Section 216- Investigation of ownership of company
                     (Notified on 1st April, 2014)
                     (Sub-section (2) notified on 1st June, 2016)
                     Section 217- Procedure, powers, etc., of inspectors.
                     (Notified on 1st April, 2014)
                     Section 218- Protection of employees during
                              investigation.
                     (Notified on 1st June, 2016)
                     Section 219- Power of inspector to conduct
                              investigation into affairs of related
                              companies, etc.
                     (Notified on 1st April, 2014)
                     Section 220- Seizure of documents by inspector.
                     (Notified on 1st April, 2014)
                     Section 221- Freezing of assets of company on
                              inquiry and investigation.
                     (Notified on 1st June, 2016)
                     Section 222- Imposition of restrictions upon
                              securities.
                     (Notified on 1st June, 2016)
                     Section 223- Inspector's report.
                     (Notified on 1st April, 2014)
                     Section 224- Actions to be taken in pursuance of
                              inspector's report
                     (Notified on 1st April, 2014)

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                                                          Annexure-1

                   (Sub-section (2) and (5) notified on 1st June,
                   2016)
                   Section 225- Expenses of investigation.
                   (Notified on 1st April, 2014)
                   Section 226- Voluntary winding up of company, etc.,
                            not to stop investigation proceedings.
                   (Notified on 15th December, 2016)
                   Section 227- Legal advisers and bankers not to
                            disclose certain information.
                   (Notified on 9th September, 2016)
                   Section 228- Investigation, etc., of foreign
                            companies.
                   (Notified on 1st April, 2014)
                   Section 229- Penalty for furnishing false statement,
                            mutilation, destruction of documents.
                   (Notified on 1st April, 2014)

CHAPTER XV         Section 230- Power to compromise or make
Compromises,                arrangements with creditors and members.
Arrangements and   (Except Sub- Section (11) and (12))
Amalgamations      (Notified on 15th December, 2016)
(230 - 240)        Section 231-Power of Tribunal to enforce
                            compromise or arrangement.
                   (Notified on 15th December, 2016)
                   Section 232- Merger and amalgamation of
                            companies.
                   (Notified on 15th December, 2016)
                   Section 233- Merger or amalgamation of certain
                            companies.
                   (Notified on 15th December, 2016)
                   Section 235- Power to acquire shares of
                            shareholders dissenting from scheme or
                            contract approved by majority.
                   (Notified on 15th December, 2016)
                   Section 236- Purchase of minority shareholding.
                   (Notified on 15th December, 2016)
                   Section 237- Power of Central Government to

                               77
Frequently Asked Questions on The Companies Act, 2013

                              provide for amalgamation of companies in
                              public interest.
                     (Notified on 15th December, 2016)
                     Section 238- Registration of offer of schemes
                              involving transfer of shares.
                     (Notified on 15th December, 2016)
                     Section 239- Preservation of books and papers of
                              amalgamated companies.
                     (Notified on 15th December, 2016)
                     Section 240-Liability of officers in respect of
                              offences committed prior to merger,
                              amalgamation, etc.
                     (Notified on 15th December, 2016)
CHAPTER XVI          Section 241- Application to Tribunal for relief in
Prevention of                 cases of oppression, etc.
Oppression and       (Notified on 1st June, 2016)
Mismanagement        Section 242- Powers of Tribunal.
(241 - 246)          (Notified on 1st June, 2016 except clause (b) of
                              sub-section (1), clause (c) & (g) of sub-
                              section (2)
                     Clause (b) of sub-section (1) of section 242,
                              clauses (c) and (g) of sub-section (2) of
                              section 242 (Notified on 9th September,
                              2016)
                     Section 243- Consequence of termination or
                              modification of certain agreements.
                     (Notified on 1st June, 2016)
                     Section 244- Right to apply under section 241.
                     (Notified on 1st June, 2016)
                     Section 245- Class action.
                     (Notified on 1st June, 2016)
                     Section 246- Application of certain provisions to
                              proceedings under section 241 or section
                              245.
                     (Notified on 9th September, 2016)
CHAPTER XX           Section 270- Modes of winding up.
Winding up           (Notified on 15th December, 2016)


                                78
                                                             Annexure-1

(270-365)                Section 271- Circumstances in which company may
                                  be wound up by Tribunal.
PART I.- Winding up      (Notified on 15th December, 2016)
by                       Section 272- Petition for winding up.
the Tribunal             (Notified on 15th December, 2016)
(271- 303)               Section 273- Powers of Tribunal.
                         (Notified on 15th December, 2016)
PART II.- Voluntary      Section 274- Directions for filing statement of
winding up                        affairs.
(304- 323)               (Notified on 15th December, 2016)
                         Section 275- Company Liquidators and their
PART III.- Provisions             appointments.
applicable to every      (Notified on 15th December, 2016)
mode of winding up       Section 276- Removal and replacement of
(324- 358)                        liquidator.
                         (Notified on 15th December, 2016)
PART IV.-     Official   Section 277- Intimation to Company Liquidator,
liquidators                       provisional liquidator and Registrar.
(359- 365)               (Notified on 15th December, 2016)
                         Section 278- Effect of winding up order.
                         (Notified on 15th December, 2016)
                         Section 279- Stay of suits, etc., on winding up
                                  order.
                         (Notified on 15th December, 2016)
                         Section 280- Jurisdiction of Tribunal.
                         (Notified on 15th December, 2016)
                         Section 281- Submission of report by Company
                                  Liquidator.
                         (Notified on 15th December, 2016)
                         Section 282- Directions of Tribunal on report of
                                  Company Liquidator.
                         (Notified on 15th December, 2016)
                         Section 283- Custody of company's properties.
                         (Notified on 15th December, 2016)
                         Section 284- Promoters, directors, etc., to co-
                                  operate with Company Liquidator.
                         (Notified on 15th December, 2016)

                                    79
Frequently Asked Questions on The Companies Act, 2013

                     Section 285- Settlement of list of contributories and
                               application of assets.
                     (Notified on 15th December, 2016)
                     Section 286- Obligations of directors and managers.
                     (Notified on 15th December, 2016)
                     Section 287- Advisory Committee.
                     (Notified on 15th December, 2016)
                     Section 288- Submission of periodical reports to
                               Tribunal.
                     (Notified on 15th December, 2016)
                     Section 290- Powers and duties of Company
                               Liquidator.
                     (Notified on 15th December, 2016)
                     Section 291- Provision for professional assistance
                               to Company Liquidator.
                     (Notified on 15th December, 2016)
                     Section 292- Exercise and control of Company
                               Liquidator's powers.
                     (Notified on 15th December, 2016)
                     Section 293- Books to be kept by Company
                               Liquidator.
                     (notified on 15th December, 2016)
                     Section 294- Audit of Company Liquidator's
                               accounts.
                     (Notified on 15th December, 2016)
                     Section 295- Payment of debts by contributory and
                               extent of set-off.
                     (Notified on 15th December, 2016)
                     Section 296- Power of Tribunal to make calls.
                     (Notified on 15th December, 2016)
                     Section 297- Adjustment of rights of contributories.
                     (Notified on 15th December, 2016)
                     Section 298- Power to order costs.
                     (Notified on 15th December, 2016)
                     Section 299- Power to summon persons suspected
                               of having property of company, etc.
                     (Notified on 15th December, 2016)

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                                         Annexure-1

Section 300- Power to order examination of
         promoters, directors, etc.
(Notified on 15th December, 2016)
Section 301- Arrest of person trying to leave India
         or abscond.
(Notified on 15th December, 2016)
Section 302- Dissolution of company by Tribunal.
(Notified on 15th December, 2016)
Section 303- Appeals from orders made before
         commencement of Act.
(Notified on 15th December, 2016)
Section 324- Debts of all descriptions to be
         admitted to proof.
(Notified on 15th December, 2016)
Section 326- Overriding preferential payments.
(Notified on 15th December, 2016)
Section 327- Preferential payments.
(Notified on 15th December, 2016)
Section 328- Fraudulent preference.
(Notified on 15th December, 2016)
Section 329- Transfers not in good faith to be void.
(Notified on 15th December, 2016)
Section 330- Certain transfers to be void.
(Notified on 15th December, 2016)
Section 331- Liabilities and rights of certain persons
         fraudulently preferred.
(Notified on 15th December, 2016)
Section 332- Effect of floating charge.
(Notified on 15th December, 2016)
Section 333- Disclaimer of onerous property.
(Notified on 15th December, 2016)
Section 334- Transfers, etc., after commencement
         of winding up to be void.
(Notified on 15th December, 2016)
Section 335- Certain attachments, executions, etc.,
         in winding up by Tribunal to be void.


            81
Frequently Asked Questions on The Companies Act, 2013

                     (Notified on 15th December, 2016)
                     Section 336- Offences by officers of companies in
                              liquidation.
                     (Notified on 15th December, 2016)
                     Section 337- Penalty for frauds by officers.
                     (Notified on 15th December, 2016)
                     Section 338- Liability where proper accounts not
                              kept.
                     (Notified on 15th December, 2016)
                     Section 339- Liability for fraudulent conduct of
                              business.
                     (Notified on 15th December, 2016)
                     Section 340- Power of Tribunal to assess damages
                              against delinquent directors, etc.
                     (Notified on 15th December, 2016)
                     Section 341- Liability under sections 339 and 340 to
                              extend to partners or directors in firms or
                              companies.
                     (Notified on 15th December, 2016)
                     Section 342- Prosecution of delinquent officers and
                              members of company.
                     (Notified on 15th December, 2016)
                     Section 343- Company Liquidator to exercise
                              certain powers subject to sanction.
                     (Notified on 15th December, 2016)
                     Section 344- Statement that company is in
                              liquidation.
                     (Notified on 15th December, 2016)
                     Section 345- Books and papers of company to be
                              evidence.
                     (Notified on 15th December, 2016)
                     Section 346- Inspection of books and papers by
                              creditors and contributories.
                     (Notified on 15th December, 2016)
                     Section 347- Disposal of books and papers of
                              company.
                     (Notified on 15th December, 2016)


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                                       Annexure-1

Section 348- Information as to pending liquidations.
(Notified on 15th December, 2016)
Section 349- Official Liquidator to make payments
         into public account of India.
(Notified on 15th December, 2016)
Section 350- Company Liquidator to deposit monies
         into scheduled bank.
(Notified on 15th December, 2016)
Section 351- Liquidator not to deposit monies into
         private banking account.
(Notified on 15th December, 2016)
Section 352- Company Liquidation Dividend and
         Undistributed Assets Account.
(Notified on 15th December, 2016)
Section 353- Liquidator to make returns, etc.
(Notified on 15th December, 2016)
Section 354- Meetings to ascertain wishes of
         creditors or contributories.
(Notified on 15th December, 2016)
Section 355- Court, Tribunal or person, etc., before
         whom affidavit may be sworn.
(Notified on 15th December, 2016)
Section 356- Powers of Tribunal to declare
         dissolution of company void.
(Notified on 15th December, 2016)
Section 357- Commencement of winding up by
         Tribunal.
(Notified on 15th December, 2016)
Section 358- Exclusion of certain time in computing
         period of limitation.
(Notified on 15th December, 2016)
Section 359- Appointment of Official Liquidator.
(Notified on 15th December, 2016)
Section 360- Powers and functions of Official
         Liquidator.
(Notified on 15th December, 2016)
Section 361- Summary procedure for liquidation.

            83
Frequently Asked Questions on The Companies Act, 2013

                         (Notified on 15th December, 2016)
                         Section 362- Sale of assets and recovery of debts
                                  due to company.
                         (Notified on 15th December, 2016)
                         Section 363- Settlement of claims of creditors by
                                  Official Liquidator.
                         (Notified on 15th December, 2016)
                         Section 364- Appeal by creditor.
                         (Notified on 15th December, 2016)
                         Section 365- Order of dissolution of company.
                         (Notified on 15th December, 2016)
CHAPTER XXI              Section   366- Companies capable of being
PART I.--Companies                registered.
authorised to register   (Notified on 1st April, 2014)
under this Act           Section 367- Certificate of registration of existing
(366- 374)                        companies. (Notified on 1st April, 2014)
                         Section 368- Vesting of property on registration.
PART II.--Winding up     (Notified on 1st April, 2014)
of unregistered          Section 369- Saving of existing liabilities.
companies                (Notified on 1st April, 2014)
(375- 378)               Section 370- Continuation of pending legal
                                  proceedings
                         (Notified on 1st April, 2014)
                         - Proviso notified on 15th December, 2016
                         Section 371- Effect of registration under this Part.
                         (Notified on 1st April, 2014)
                         Section 372- Power of Court to stay or restrain
                                  proceedings.
                         (Notified on 15th December, 2016)
                         Section 373- Suits stayed on winding up order.
                         (Notified on 15th December, 2016)
                         Section 374- Obligation of Companies registering
                                  under this Part.
                         (Notified on 1st April, 2014)
                         Section 375- Winding up of unregistered
                                  companies.


                                     84
                                                              Annexure-1

                       (Notified on 15th December, 2016)
                       Section 376- Power to wind up foreign companies
                                although dissolved.
                       (Notified on 15th December, 2016)
                       Section 377- Provisions of Chapter cumulative.
                       (Notified on 15th December, 2016)
                       Section 378- Saving and construction of
                                enactments conferring power to wind up
                                partnership firm, association or company,
                                etc., in certain cases.
                       (Notified on 15th December, 2016)
Chapter XXII-          Section 379- Application of Act to foreign
Companies                       companies.
Incorporated Outside   (Notified on 12th September,2013)
India                  Section 380- Documents, etc., to be delivered to
(379- 393)                      Registrar by foreign companies.
                       (Notified on 1st April, 2014)
                       Section 381- Accounts of foreign company.
                       (Notified on 1st April, 2014)
                       Section 382- Display of name, etc., of foreign
                                company.
                       (Notified on 12th September,2013)
                       Section 383- Service on foreign company.
                       (Notified on 12th September,2013)
                       Section 384- Debentures, annual return, registration
                                of charges, books of account and their
                                inspection.
                       (Notified on 1st April, 2014)
                       Section 385- Fee for registration of documents.
                       (Notified on 1st April, 2014)
                       Section 386- Interpretation.
                       (Notified on 12th September, 2013)
                       [Except clause (a) notified on 1st April, 2014]
                       Section 387- Dating of prospectus and particulars to
                                be contained therein.
                       (Notified on 1st April, 2014)
                       Section 388- Provisions as to expert's consent and

                                   85
Frequently Asked Questions on The Companies Act, 2013

                                allotment.
                       (Notified on 1st April, 2014)
                       Section 389- Registration of prospectus.
                       (Notified on 1st April, 2014)
                       Section 390- Offer of Indian Depository Receipts.
                       (Notified on 1st April, 2014)
                       Section 391- sub-section 1- Application of sections
                                34 to 36 and Chapter XX.
                       (Notified on 1st April, 2014)
                       [Sub-section 1 notified on 15th December, 2016]
                       Section 392- Punishment for contravention.
                       (Notified on 1st April, 2014)
                       Section 393- Company's failure to comply with
                                provisions of this Chapter not to affect
                                validity of contracts, etc. (Notified on 1st
                                April, 2014)
Chapter XXIII-         Section 394- Annual reports on Government
Government                      companies.
Companies              (Notified on 12th September, 2013)
(394 - 395)            Section 395- Annual reports where one or more
                                State Governments are members of
                                companies. (Notified on 1st April, 2014)
CHAPTER XXIV           Section 396- Registration offices.
Registration offices   (Notified on 1st April, 2014)
and fees               Section 397- Admissibility of certain documents as
(396 - 404)                     evidence.
                       (Notified on 1st April, 2014)

                       Section 398- Provisions relating to filing of
                                applications, documents, inspection, etc.,
                                in electronic form. (Notified on 1st April,
                                2014)
                       Section 399- Inspection, production and evidence of
                                documents kept by Registrar.
                       (Notified on 1st April, 2014)
                       (reference of word Tribunal in sub-section (2)
                                notified on 1st June, 2016)

                                   86
                                                               Annexure-1

                       Section 400- Electronic form to be exclusive,
                                alternative or in addition to physical form.
                       (Notified on 1st April, 2014)
                       Section 401- Provision of value added services
                                through electronic form.
                       (Notified on 1st April, 2014)
                       Section 402- Application of provisions of
                                Information Technology Act, 2000.
                       (Notified on 1st April, 2014)
                       Section 403- Fee for filing, etc.
                       (Notified on 1st April, 2014)
                       Section 404- Fees, etc., to be credited into public
                                account. (Notified on 1st April, 2014)
Chapter XXV-           Section 405- Power of Central Government to direct
Companies to Furnish            companies to furnish information or
Information or                  statistics.
Statistics             (Notified on 12th September, 2013)
(405)
CHAPTER XXVI           Section 406- Power to modify Act in its application
Nidhis                          to Nidhis.
(406)                  (Notified on 1st April, 2014)

Chapter XXVII-         Section 407- Definitions.
National Company       (Notified on 12th September, 2013)
Law Tribunal and       Section 408- Constitution of National Company Law
Appellate Tribunal              Tribunal.
(407 - 434)            (Notified on 12th September, 2013)
                       Section 409- Qualification of President and
                                Members of Tribunal.
                       (Notified on 12th September, 2013)
                       Section 410- Constitution of Appellate Tribunal
                       (Notified on 12th September, 2013)
                       Section 411- Qualification of Chairperson and
                                Members of Appellate Tribunal.
                       (Notified on 12th September, 2013)
                       Section 412- Selection of Members of Tribunal and


                                   87
Frequently Asked Questions on The Companies Act, 2013

                              Appellate Tribunal.
                     (Notified on 12th September, 2013)
                     Section 413- Term of office of President,
                              Chairperson and other Members.
                     (Notified on 12th September, 2013)
                     Section 414- Salary, allowances and other terms
                              and conditions of service of Members.
                     (Notified on 12th September, 2013)
                     Section 415- Acting President and Chairperson of
                              Tribunal or Appellate Tribunal.
                     (Notified on 1st June, 2016)
                     Section 416- Resignation of Members.
                     (Notified on 1st June, 2016)
                     Section 417- Removal of Members.
                     (Notified on 1st June, 2016)
                     Section 418- Staff of Tribunal and Appellate
                              Tribunal.
                     (Notified on 1st June, 2016)
                     Section 419- Benches of Tribunal.
                     (Notified on 1st June, 2016)
                     Section 420- Orders of Tribunal.
                     (Notified on 1st June, 2016)
                     Section 421- Appeal from Orders of Tribunal.
                     (Notified on 1st June, 2016)
                     Section 422- Expeditious disposal by Tribunal and
                              Appellate Tribunal.
                     (Notified on 1st June, 2016)
                     Section 423- Appeal to Supreme Court.
                     (Notified on 1st June, 2016)
                     Section 424- Procedure before Tribunal and
                              Appellate Tribunal.
                     (Notified on 1st June, 2016)
                     Section 425- Power to punish for contempt.
                     (Notified on 1st June, 2016)
                     Section 426- Delegation of powers.
                     (Notified on 1st June, 2016)


                                88
                                                        Annexure-1

                  Section 427- President, Members, officers, etc., to
                           be public servants.
                  (Notified on 1st June, 2016)
                  Section 428- Protection of action taken in good
                           faith.
                  (Notified on 1st June, 2016)
                  Section 429- Power to seek assistance of Chief
                           Metropolitan
                  Magistrate, etc.
                  (Notified on 1st June, 2016)
                  Section 430- Civil court not to have jurisdiction.
                  (Notified on 1st June, 2016)
                  Section 431- Vacancy in Tribunal or Appellate
                           Tribunal not to invalidate acts or
                           proceedings.
                  (Notified on 1st June, 2016)
                  Section 432- Right to legal representation.
                  (Notified on 1st June, 2016)
                  Section 433- Limitation.
                  (Notified on 1st June, 2016)
                  Section 434- Sub- Section 1 (a) and (b) of Transfer
                           of certain pending proceedings.
                  (Notified on 1st June, 2016)
                  Sub- Section 1 (c) of Transfer of certain pending
                           proceedings.
                  (Notified on 15th December, 2016)
Chapter XXVIII-   Section 435- Establishment of Special Courts.
Special Courts    (Notified on 18th May, 2016)
(435 - 446)       Section 436- Offences triable by Special Courts.
                  (Notified on 18th May, 2016)
                  Section 437- Appeal and revision.
                  (Notified on 18th May, 2016)
                  Section 438- Application of Code to proceedings
                           before Special Court.
                  (Notified on 18th May, 2016)
                  Section 439- Offences to be non-cognizable.


                             89
Frequently Asked Questions on The Companies Act, 2013

                     (Notified on 12th September,2013)
                     Section 440- Transitional provisions.
                     (Notified on 18th May, 2016)
                     Section 441- Compounding of certain offences.
                     (Notified on 1st June, 2016)
                     Section 442- Mediation and conciliation penal.
                     (Notified on 1st April, 2014)
                     Section 443- Power of Central Government to
                              appoint company prosecutors.
                     (Notified on 12th September, 2013)
                     Section 444- Appeal against acquittal.
                     (Notified on 12th September, 2013)
                     Section 445- Compensation for accusation without
                              reasonable cause.
                     (Notified on 12th September, 2013)
                     Section 446- Application of fines.
                     (Notified on 12th September, 2013)
Chapter XXIX         Section 447- Punishment for fraud.
Miscellaneous        (Notified on 12th September, 2013)
(447 - 470)          Section 448- Punishment for false statements.
                     (Notified on 12th September, 2013)
                     Section 449- Punishment for false evidence.
                     (Notified on 12th September, 2013)
                     Section 450- Punishment where no specific penalty
                              or punishment is provided.
                     (Notified on 12th September, 2013)
                     Section 451- Punishment in case of repeated
                              default.
                     (Notified on 12th September, 2013)
                     Section 452- Punishment for wrongful withholding of
                              property.
                     (Notified on 12th September, 2013)
                     Section 453- Punishment for improper use of
                              "Limited" or "Private Limited".
                     (Notified on 12th September, 2013)
                     Section 454- Adjudication of penalties.


                                90
                                       Annexure-1

(Notified on 1st April, 2014)
Section 455- Dormant company
(Notified on 1st April, 2014)
Section 456- Protection of action taken in good
         faith.
(Notified on 12th September, 2013)
Section 457- Non-disclosure of information in
         certain cases. (Notified on 12th September,
         2013)
Section 458- Delegation by Central Government of
         its powers and functions.
(Notified on 12th September, 2013)
Section 459- Powers of Central Government or
         Tribunal to accord approval, etc., subject
         to conditions and to prescribe fees on
         applications.
(Notified on 12th September, 2013)
Section 460- Condonation of delay in certain cases.
(Notified on 12th September, 2013)
Section 461- Annual report by Central Government.
(Notified on 12th September, 2013)
Section 462- Power to exempt a class or classes of
         companies from provisions of this Act.
(Notified on 12th September, 2013)
Section 463- Power of Court to grant relief in
         certain cases
(Notified on 12th September, 2013)
Section 464- Prohibition of association or
         partnership of persons exceeding certain
         number.
(Notified on 1st April, 2014)
Section 465- Repeal of certain enactments and
         savings.
(Notified on 1st June, 2016)
Section 466- Dissolution of Company Law Board
         and consequential provisions.
(Notified on 1st June, 2016)


            91
Frequently Asked Questions on The Companies Act, 2013

                     Section 467- Power of Central Government to
                              amend Schedules. (Notified on 12th
                              September, 2013)
                     Section 468- Power of Central Government to make
                              rules relating to winding up.
                     (Notified on 12th September, 2013)
                     Section 469- Power of Central Government to make
                              rules.
                     (Notified on 12th September, 2013)
                     Section 470- Power to remove difficulties.
                     (Notified on 12th September, 2013)
Schedules            SCHEDULE I- Section 4 and 5
                     (Notified on 1st April, 2014)
                     SCHEDULE II- Useful Lives to Compute
                              Depreciation
                     (Notified on 1st April, 2014)
                     SCHEDULE III- General Instructions For
                              Preparation Of Balance Sheet And
                              Statement Of Profit And Loss of A
                              Company
                     (Notified on 1st April, 2014)
                     SCHEDULE IV- Code For Independent Directors
                     (Notified on 1st April, 2014)
                     SCHEDULE V - Conditions to be Fulfilled for the
                              Appointment of a Managing or Whole Time
                              Director or a Manager Without the
                              Approval of the Central Government
                     (Notified on 1st April, 2014)
                     SCHEDULE VI- Section 55 And 186 Related To
                              Infrastructure Projects
                     (Notified on 1st April, 2014)
                     SCHEDULE VII-Corporate Social Responsibility
                     (Notified on 1st April, 2014)




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