companies act, 2013 chapter vii management and administration

i

THE COMPANIES ACT, 2013

Chapter – 7 :- Management and Administration

Companies (Management and Administration) Rules, 2014

ii

COLOUR SCHEME

1) Green Colour for Companies Act 2013 2) Lavender Colour for applicability 3) Brown Colour for Companies (Management and Administration) Rules, 2014

4) Yellow colour for case laws 5) Rose Colour for Notes on clause 6) Red Colour for Companies Act, 1956 7) Tan Colour For Rules under companies Act ,1956 8) Dark Yellow Colour for Modification in Companies Act 2013 in respect of Companies Act

1956 9) Pink Colour for Comments 10) Amendments in Companies Act 2013 11) Notes

iii

INDEX

Section no.

Name of the section

Relevant Rules

Pages

Details of Orders, Notifications and Circulars related to the Companies Act, 2013 Issued by MCA

v

Notification, Circulars & Orders related to Chapter 7 of the Companies Act 2013

xii

88 Register of members, etc 3, 4, 5, 6, 7, 8 1 89 Declaration in respect of beneficial interest in any share 9 11 90 Investigation of beneficial ownership of shares in certain cases 15 91 Power to close register of members or debenture holders or other

security holders 10 16

92 Annual return. 11, 12 18 93 Return to be filed with Registrar in case promoters’ stake changes 13 24 94 Place of keeping and inspection of registers, returns, etc 14, 15, 16 25 95 Registers, etc., to be evidence. 30 96 Annual general meeting 31 97 Power of Tribunal to call annual general meeting 36 98 Power of Tribunal to call meetings of members, etc 38 99 Punishment for default in complying with provisions of sections

96 to 98. 40

100 Calling of extraordinary general meeting 17 41 101 Notice of meeting 18 45 102 Statement to be annexed to notice 49 103 Quorum for meetings 52 104 Chairman of meetings 55 105 Proxies 19 56 106 Restriction on voting rights 60 107 Voting by show of hands 62 108 Voting through electronic means 20 63 109 Demand for poll 21 74 110 Postal ballot 22 78 111 Circulation of members’ resolution 83 112 Representation of President and Governors in meetings 86 113 Representation of corporations at meeting of companies and of

creditors. 88

114 Ordinary and special resolutions. 90 115 Resolutions requiring special notice 23 92

iv

116 Resolutions passed at adjourned meeting 94 117 Resolutions and agreements to be filed. 24 95 118 Minutes of proceedings of general meeting, meeting of Board of

Directors and other meeting and resolutions passed by postal ballot.

25 99

119 Inspection of minute-books of general meeting. 26 103 120 Maintenance and inspection of documents in electronic form 27,28,29 105 121 Report on annual general meeting 31 108 122 Applicability of this Chapter to One Person Company 110

v

Details of Orders, Notifications and Circulars related to The Companies Act, 2013 issued

by MCA

a) Orders - Issued from 20.09.2013 to 29.08.2016

S no. Date Description (Name) 16 30.06.2016 S.O. (E) Companies (Removal of Difficulties) Third Order, 2016. 15 29.03.2016 S.O.1226(E) Companies (Removal of Difficulties) First Order, 2016 14 29.03.2016 S.O. 1228(E) Companies (Auditor's Report) Order, 2016 13 29.03.2016 S.O. 1227(E) Companies (Removal of Difficulties) 2nd Order, 2016 12 10.03.2016 S.O. (E) Under the proviso to the clause(d) of sub-section (2) of section 68 of the

Companies Act, 2013 11 10.04.2015 S.O. 990(E) The Companies (Auditor’s Report) Order, 2015 10 13.02.2015 S.O. 504(E). The Companies (Removal Of Difficulties) Order, 2015. 9 04.09.2014 S.O. 2226(E). The Companies (Removal Of Difficulties) Seventh Order, 2014. 8 24.07.2014 S.O. 1894 (E) The Companies (Removal of Difficulties) Sixth Order, 2014. 7 09.07.2014 S.O. 1820(E) The Companies (Removal of Difficulties) Fifth Order, 2014. 6 06.06.2014 S.O. 1460 (E) The Companies (Removal of Difficulties) Fourth Order, 2014. 5 02.06.2014 S.O. 1428(E) The Companies (Removal of Difficulties) Second Order,2014 4 02.06.2014 S.O. 1429(E) The Companies (Removal of Difficulties) Third Order, 2014. 3 27.05.2014 S.O. 1406 (E) Corrigendum: "the Companies (Removal of Difficulties) Second Order,

2014” read as “the Companies (Removal of Difficulties) Order, 2014”. 2 29.04.2014 S.O. 1177(E) Companies (Removal of Difficulties) Order, 2014 1 20.09.2013 S.O. 2821(E) Companies (Removal of Difficulties) Order,2013 dated 20.09.2013

B) Notifications – Issued from 20.09.2013 to 29.08.2016 44 01.06.2016

S.O. 1932(E) and 1933( E) Notification constituting the National Company Law Tribunal and National Company Law Appellate Tribunal under Sections 408 and 410 respectively of the Companies Act, 2013

43 01.06.2016 S.O. 1934(E) and S.O.1935(E)

Commencement Notification under Section 1(3) of the Companies Act, 2013 and Notification constituting the Benches of National Company Law Tribunal

42 01.06.2016 S.O. 1936(E) Transfer of matters or proceedings or cases pending before the Company Law Board to National Company Law Tribunal

41 18.05.2016 S.O. 1795(E) Commencement of section 2(29), sections 435 to 438 and 440 of Companies Act, 2013

40 18.05.2016 S.O. 1796(E) Special courts under section 435 of Companies Act, 2013 39 29.04.2016 S.O.E Sub-section (1) of section 458 of the companies Act(18 of 2013)

http://www.mca.gov.in/Ministry/pdf/ROD_Third_Order_2016.pdf

http://www.mca.gov.in/Ministry/pdf/CoOrder_30032016_III.pdf

http://www.mca.gov.in/Ministry/pdf/CoOrder_30032016.pdf

http://www.mca.gov.in/Ministry/pdf/CoOrder_30032016_II.pdf

http://www.mca.gov.in/Ministry/pdf/Order_11032016.pdf

http://www.mca.gov.in/Ministry/pdf/Order_11032016.pdf

http://www.mca.gov.in/Ministry/pdf/Companies_Auditors_Report_Order_2015.pdf

http://www.mca.gov.in/Ministry/pdf/ROD_1st_2015.pdf

http://www.mca.gov.in/Ministry/pdf/ROD_7th_2014.pdf

http://www.mca.gov.in/Ministry/pdf/ROD_Six_2014.pdf

http://www.mca.gov.in/Ministry/pdf/ROD_Fifth_2014.pdf

http://www.mca.gov.in/Ministry/pdf/Fourth_ROD.pdf

http://www.mca.gov.in/Ministry/pdf/ROD_Second_07082014.pdf

http://www.mca.gov.in/Ministry/pdf/ROD_Third.pdf

http://www.mca.gov.in/Ministry/pdf/ROD_Corrigendum.pdf

http://www.mca.gov.in/Ministry/pdf/ROD_Corrigendum.pdf

http://www.mca.gov.in/Ministry/pdf/RODOrder1406_1177_07082014.pdf

http://www.mca.gov.in/Ministry/pdf/CompaniesRemovalOfDifficultiesOrder2013.pdf

http://www.mca.gov.in/Ministry/pdf/Notification_02062016_II.pdf

http://www.mca.gov.in/Ministry/pdf/Notification_02062016_I.pdf

http://www.mca.gov.in/Ministry/pdf/Notification_02062016_III.pdf

http://www.mca.gov.in/Ministry/pdf/NotificationOrder_19052016_1.pdf

http://www.mca.gov.in/Ministry/pdf/NotificationOrder_19052016_2.pdf

http://www.mca.gov.in/Ministry/pdf/General_notification_04052016.pdf

vi

38 26.04.2016 S.O. 1556(E) Section 396 of CA 2013 - Jurisdiction of the state of Telangana 37 06.04.2016 G.S.R. 404(E) In exercise of the powers conferred by sub section (1) of section 467 of the

Companies Act, 2013 (18 of 2013) 36 23.03.2016 S.O.1211(E) Notification for CRC phase-2 Incorporation 35 22.01.2016 S.O. 218(E) Notification under section 396 of Companies Act, 2013 dated: 22.01.2016. 34 13.01.2016 S.O.125(E) Commencement of sub-sections (5), (6) and (7) of section 125 of CA 2013, 33 31.12.2015 S.O.3557(E) Notification under section 458 of Companies Act, 2013: Delegating of

powers to RDs under section 208 of the said Act. 32 14.12.2015 S.O.3388(E) Commencement of section 13 & 14 of the Companies (Amendment) Act,

2015 31 03.11.2015 G.S.R. 832(E) Notification regarding sub-section (1) of Section 396 of the Companies Act,

2013 (18 of 2013) 30 10.09.2015 S.O.2462(E) Notification for amendment in S.O.2425 (E) dated 18.09.2014 - section

210A of Companies Act 1956. 29 04.09.2015 S.O.2437(E) Notification regarding sub-section (6) of section 129 of the Companies Act,

2013 (18 of 2013) 28

04.09.2015 G.S.R.679(E) Notification regarding sub-section (1) of section 467 of the Companies Act, 2013 (18 of 2013)

27 05.06.2015 G.S.R. 466(E). Exemptions to Section 8 (Non-Profit) under section 462 of CA 2013 26 05.06.2015 G.S.R. 464(E). Exemptions to Private Companies under section 462 of CA 2013 25 05.06.2015 G.S.R. 465(E). Exemptions to Nidhis under section 462 of CA 2013 24 05.06.2015 G.S.R. 463(E). Exemptions to Government Companies under section 462 of CA 2013 23 29.05.2015 S.O.1440(E) Commencement Notification of Companies (Amendment) Act, 2015 22 31.03.2015 S.O.891(E) Delegation of powers to RDs u/s 94(5) read with section 458 of CA, 2013 21 24.03.2015 S.O.831(E)

Appointment of ROCs as adjudicating officers with jurisdiction and their appellate authority’s u/s 454 of CA 2013.

20 16.02.2015 G.S.R. 111(E) The Companies (Indian Accounting Standards) Rules, 2015. 19 09.01.2015 S.O.129(E)

Notification Notification authorizing officers for filing complaint under section 159 read with section 155 of the Companies Act, 2013

18 24.10.2014 G.S.R. 741(E) Notification

Notification dated: 24.10.2014 - Amendment in Schedule VII of the Companies Act, 2013

17 18.09.2014 S.O.2425(E) Notification

Notification for National Advisory Committee on Accounting Standards

16 29.08.2014 G.S.R.627(E) Notification

Amendment in schedule II of Companies Act, 2013


Amendment in schedule VII of Companies Act, 2013


Second Proviso to sub-section (1) of Section 203 of Companies Act, 2013


Notification for Registrar of Companies at Hyderabad having territorial jurisdiction in the whole State of Telangana


Notification for the Official Liquidator at Hyderabad having territorial jurisdiction in the whole State of Telangana

http://www.mca.gov.in/Ministry/pdf/General_Notification_27042016.pdf

http://www.mca.gov.in/Ministry/pdf/Notification_04072016.pdf


http://www.mca.gov.in/Ministry/pdf/CRC_Notification_22012016.pdf

http://www.mca.gov.in/Ministry/pdf/Commencement_Section125_Notification_13012016.pdf

http://www.mca.gov.in/Ministry/pdf/Notification_Gazette_22042016.pdf

http://www.mca.gov.in/Ministry/pdf/Companies_Amendment_act_14122015.pdf



http://www.mca.gov.in/Ministry/pdf/Notification_07092015_1.pdf


http://www.mca.gov.in/Ministry/pdf/Exemptions_to_Section8_companies_05062015.pdf

http://www.mca.gov.in/Ministry/pdf/Exemptions_to_private_companies_05062015.pdf

http://www.mca.gov.in/Ministry/pdf/Exemptions_to_nidhis_companies_05062015.pdf

http://www.mca.gov.in/Ministry/pdf/Exemptions_to_govt_companies_05062015.pdf


http://www.mca.gov.in/Ministry/pdf/Delegation_Powers_Notification_01042015.pdf


http://www.mca.gov.in/MinistryV2/Stand.html

http://www.mca.gov.in/Ministry/pdf/Notification_9jan2015_12012015.pdf

http://www.mca.gov.in/Ministry/pdf/Amendment_Notification_24102014.pdf







vii

11 06.06.2014 S.O.1459(E)

Notification Commencement of provisions of sub sections (2) and (3) of section 74


Delegation of powers under section 458 of CA 2013 to ROCs


Delegation of powers u-s 153 and 154 of CA 2013 to RD Noida


Delegation of powers under section 458 of CA 2013 to RDs

7 27.03.2014 S.O(E) Notification

Nomenclature of various forms prescribed under the provisions of Companies Act, 2013 being notified.

6 27.03.2014 S.O 902(E) Notification

Commencement Notification of the Companies Act, 2013


Notification relating to effective date of provisions of section 135 and Schedule VII of Companies Act, 2013


Notification relating to amendments of Schedule VII of Companies Act, 2013


Corrigenda to Notification no. GSR 130E dated 27.02.2014 regarding Schedule VII [w.r.t CSR Activities]

2 12.09.2013 Commencement Notification

Commencement Notification Of Companies Act 2013

1 20.09.2013 Companies (Removal of Difficulties) Order,2013

Companies (Removal of Difficulties) Order,2013

C) Circulars - Issued from 13.09.2013 to 29.08.2016

70 31.05.2016 General Circular 07/2016

Relaxation of additional fees and extension of time for filing of e-Forms by the Companies under Companies Act,2013 and for filing of Annual Return (Form 11 ) by the LLP8 under the Limited Liability Partnership Act,2008.


Relaxation of additional fees and extension of last date of filing of various e-Forms under the companies Act.


Clarification with regard to provisions of Corporate Social Responsibility under section 135 of the Companies Act, 2013


Clarification with regard to companies (Accounting Standards) Amendment Rules, 2016


Relaxation of additional fees and extension of last date of filing of various e-Forms under the Companies Act


Whether Hindu Undivided Family (HUF)/ its Karta can become partner (DP) in Limited Liability Partnership (LLP).


Frequently Asked Questions (FAQs) with regard to Corporate Social Responsibility under section 135 of the Companies Act, 2013.

http://www.mca.gov.in/Ministry/pdf/Provisions_of_section74.pdf

http://www.mca.gov.in/Ministry/pdf/delegation%20of%20powers%20under%20section%20458%20of%20CA%202013%20to%20ROCs.pdf

http://www.mca.gov.in/Ministry/pdf/delegation%20of%20powers%20u-s%20153%20and%20154%20of%20CA%202013%20to%20RD%20Noida.pdf

http://www.mca.gov.in/Ministry/pdf/delegation_of%20powers%20under%20section%20458%20of%20CA%202013%20to%20RDs.pdf

http://www.mca.gov.in/Ministry/pdf/NCA_Nomenclature.pdf

http://www.mca.gov.in/Ministry/pdf/CompaniesActNotification27March2014.PDF

http://www.mca.gov.in/Ministry/pdf/CompaniesActNotification1_2014.pdf

http://www.mca.gov.in/Ministry/pdf/CompaniesActNotification3_2014.pdf

http://www.mca.gov.in/Ministry/pdf/Notification_03April2014.pdf

http://www.mca.gov.in/Ministry/pdf/CommencementNotificationOfCA2013.pdf



http://www.mca.gov.in/Ministry/pdf/GeneralCircular07_31052016.pdf

http://www.mca.gov.in/Ministry/pdf/General_circular_16052016.pdf

http://www.mca.gov.in/Ministry/pdf/General_circular05_16052016.pdf

http://www.mca.gov.in/Ministry/pdf/General_Circular_27042016.pdf

http://www.mca.gov.in/Ministry/pdf/General_circular_13042016.pdf

http://www.mca.gov.in/Ministry/pdf/General_Circular_2_2016.pdf

http://www.mca.gov.in/Ministry/pdf/FAQ_CSR.pdf

viii

63 30.12.2015

General Circular 16/2015 Relaxation of additional fees and extension of last date of in filing of forms MGT-7 (Annual Return) and AOC-4 (Financial Statement) under the Companies Act, 2013- State of Tamil Nadu and UT of Puducherry


Relaxation of additional fees and extension of last date of in filing of forms MGT-7 (Annual Return) and AOC-4 (Financial Statement) under the Companies Act, 2013.


Relaxation of additional fees and extension of last date of filing of AOC-4, AOC-4 XBRL and MGT-7 E-Forms under the Companies Act, 2013


Extension for a period of one month for the High Level Committee on CSR.


Extension of time for filing of cost audit report to the Central Government for the Financial Year 2014-2015 in form CRA-4


Clarification with regard to circulation and filing of financial statement under relevant provisions of the Companies Act, 2013


Relaxation of additional fees and extension of last date of in filing of forms MGT-7 (Annual Return) and AOC-4 (Financial Statement) under the Companies Act,2013


Clarification on repayment of deposits accepted by the companies before the commencement of the Companies Act, 2013 under section 74 of the said Act.


Extension of time for filing of Notice of appointment of the Cost Auditor for the F.Y. 2015-16 in Form CRA-2 and filing of cost audit report to the Central Government for the F.Y. 2014-15 in form CRA-4.


Remuneration to managerial person under Schedule XIII of the Companies Act, 1956 - Clarification with regard to payment for period.


Clarification under sub-section (7) of section 186 of the Companies Act,2013


Amount received by private companies from their members, directors or their relatives before lst April, 2014 - Clarifications regarding applicability of Companies (Acceptance of Deposits) Rules, 20l4


Clarification with regard to section 185 and 186 of the Companies Act, 2013 - loans and advances to employees.


Clarification relating to filing of e-form DIR-11 & DIR-12 under the Companies Act, 2013.


Extension of time for filing of Notice of appointment of the Cost Auditor in Form CRA-2.


Constitution of a High Level Committee to suggest measures for improved monitoring of the implementation of Corporate Social Responsibility policies by the companies under Section 135 of the Companies Act, 2013


Extension of time for holding Annual General Meeting (AGM) under section 96(1) of the Companies Act, 2013-Companies registered in State of J&K


Extension of Company Law Settlement Scheme, 2014 (CLSS-2014) up to 31/12/2014.

http://www.mca.gov.in/Ministry/pdf/General_Circular_16-2015.pdf

http://www.mca.gov.in/Ministry/pdf/General_Circular_No_15_2015.pdf




http://www.mca.gov.in/Ministry/pdf/General_Circular_11-2015_21072015.pdf







http://www.mca.gov.in/Ministry/pdf/Circular_04_10032015.pdf






ix

45 13.11.2014

General Circular 43/2014 Issue of Foreign Currency Convertible Bonds (FCCBs) and Foreign Currency Bonds (FCBs) - Clarification regarding applicability of provisions of Chapter III of the Companies Act, 2013.


Clarification on matters relating to the Companies(Cost Records and Audit) Rules,2014


Company Law Settlement Scheme, 2014 (CLSS-2014) - Clarification u/s 164(2) of the Companies Act, 2013


Company Law Settlement Scheme, 2014 (CLSS-2014)


Clarification on matters relating to Consolidated Financial Statement.


Right of persons other than retiring directors to stand for directorship - Refund of deposit under section 160 of the Companies Act, 2013 in certain cases.


Clarification with regard to provisions of Corporate Social Responsibility (CSR) under section 135 of the Companies Act, 2013.


Clarification Accounting Standards(AS) 10-Capitalization of Cost-regarding


Company Law Settlement Scheme, 2014


Clarification with regard to applicability of provisions of section 139(5) and 139(7) of the Companies Act,2013


Clarification on transitional period for resolutions passed Under the Companies Act, 1956.


Extension of validity of reserved names-reg


Clarification on matters relating to Related Party Transactions.


Registration of names of the Companies shall be in consonance with the provisions of the Emblems and Names (Prevention of Improper Use)Act, 1950


Clarification on form MGT-14 through STP mode.


Clarification regarding filing of Form DPT4 under Companies Act, 2013.



Clarification on applicability of requirement for resident director.


Clarification with regard to holding of shares in a fiduciary capacity by associate company under section 2(6) of the Companies Act,2013.


Clarification relating to incorporation of a company i.e. company Incorporated outside India


Clarification with regard to format of annual return applicable for Financial Year 2013-14 and fees to be charged by companies for allowing inspection of records.







http://www.mca.gov.in/Ministry/pdf/circular_36_17092014.pdf





http://www.mca.gov.in/Ministry/pdf/Circular_No_31_19072014.pdf










x

24 18.06.2014

General Circular 21/2014 Clarifications with regard to provisions of Corporate Social Responsibility under section 135 of the Companies Act, 2013.


Clarification with regard to voting through electronic means


Clarification on Rules prescribed under the Companies Act, 2013- Matters relating to share capital and debentures


Clarification for filing of form No. INC-27 for conversion of company from public to private under the provisions of Companies Act, 2013


Filing of MGT-10-clarification


Applicability of PAN requirement for Foreign Nationals.


Clarification regarding maintaining register in new format [sub-section (9) of section 186.


Clarifications on Rules prescribed under the Companies Act, 2013 - Matters relating to appointment and qualifications of directors and Independent directors


Extension of validity period for names reserved as on 31st March, 2014


Applicability of PAN requirement for Foreign Nationals.

14 07.05.2014 General Circular. 11/2014

One time opportunity for extension of period of Reservation of Name.

13 07.05.2014 General Circular. 10/2014

Certification of E-forms/non e-forms under the Companies Act, 2013 by the Practicing Professionals:- regarding.


Availability of E-forms/non-e-forms under the companies act 2013


Commencement of provisions of the Companies Act, 2013 with regard to maintenance of books of accounts and preparations/adoption/filing of financial statements, auditors report, Board’s report and attachments to such statements and reports- Applicability with regard to relevant financial year.


Dissemination of Information with regards to provisions of the Companies Act,2013

9 01.04.2014 Table of Fees

Table of Fees


Roll out plan of various forms under the Companies Act, 2013 and continuance of forms under the provisions of Companies Act, 1956


Online payment of stamp duty and court fee stamp for issue of certified copies


Clarification with regard to section 180 of the Companies Act, 2013


Clarification with regard to Section 185 of the Companies Act, 2013.




http://www.mca.gov.in/Ministry_hn/pdf/General_Circular_18_2014.pdf


http://www.mca.gov.in/Ministry/pdf/Circular_16_2014.pdf



http://www.mca.gov.in/Ministry/pdf/General%20Circular%2013-2014.pdf

http://www.mca.gov.in/Ministry/pdf/General%20circular%20no12-2014.pdf






http://www.mca.gov.in/Ministry_hn/pdf/tableoffee_01042014.pdf


http://www.mca.gov.in/Ministry/pdf/General_Circular_No_05-2014.pdf

http://www.mca.gov.in/Ministry/pdf/gencircular_042014.pdf


xi

4 27.12.2013

General Circular 20/2013 Clarification with regard to holding of shares or exercising power in a fiduciary capacity - Holding and Subsidiary relationship under Section 2(87) of the Companies Act.2013.


Clarification with regard to applicability of section 182(3) of the Companies Act, 2013.


Clarification on the notification dated 12.9.2013.


Clarification on the notification dated 12.9.2013.



http://www.mca.gov.in/Ministry/pdf/General_Circular_16_2013.pdf.pdf

http://www.mca.gov.in/Ministry/pdf/General_Circular_15_2013.pdf.pdf

xii

NOTIFICATIONS, CIRCULARS & ORDERS RELATED CHAPTER–7 OF

COMPANIES ACT 2013

S.No Date Notification No. Description of Notifications Page no.

1) 23.06.2014 G.S.R. 415 (E) Companies (Management and Administration) Amendment Rules, 2014.

65

2) 24.07.2014 G.S.R. 537 (E) Companies (Management and Administration) Second Amendment Rules, 2014.

13, 85 & 97

3) 19.03.2015 G.S.R. 207 (E) Companies (Management and Administration) Amendment Rules, 2014

58

4) 05.06.2015 G.S.R. 466 (E) Notification G.S.R. 466(E) 32, 42 5)

28.08.2015 G.S.R. 699 (E) Companies (Management and Administration) Amendment Rules, 2015

19, 84

6)

24.09.2015 G.S.R. 737 (E) Companies (Management and Administration) Second Amendment Rules, 2015

19

7)

16.11.2015 G.S.R. 862 (E) Companies (Management and Administration) Third Amendment Rules, 2015

19

S.no Date Circulars no. Description of Circulars Page no.

1 17.06.2014 20/2014 Clarification with regard to voting through electronic means

65

2 25.06.2014 22/2014 Clarification with regard to format of annual return applicable for Financial year 2013-14 and fees to be charged by companies for allowing inspection of records

18

3 09.07.2014 28/2014 Clarification on Form MGT – 14 Through STP mode

87

S. No Date Order No. Description of Order Page no.

1) 05.06.2015 S.O. 117(E) Companies (Removal of difficulties) Second Order 2014

17

1

CHAPTER – 7 :- Companies (Management and Administration) Rules, 2014

Sections of Companies Act, 2013 :- Section 88 to 122

Sections of Companies Act, 1956 :- Section 150 to 197 SECTION – 88 REGISTER OF MEMBERS, ETC. (1) Every company shall keep and maintain the following registers in such form and in such manner as may be

prescribed, namely:— (a) register of members indicating separately for each class of equity and preference shares held by each member residing in or outside India; (b) register of debenture-holders; and (c) register of any other security holders.

(2) Every register maintained under sub-section (1) shall include an index of the names included therein. (3) The register and index of beneficial owners maintained by a depository under section 11 of the

Depositories Act, 1996, shall be deemed to be the corresponding register and index for the purposes of this Act.

(4) A company may, if so authorized by its articles, keep in any country outside India, in such manner as

may be prescribed, a part of the register referred to in sub-section (1), called “foreign register” containing the names and particulars of the members, debenture holders, other security holders or beneficial owners residing outside India.

(5) If a company does not maintain a register of members or debenture-holders or other security holders or

fails to maintain them in accordance with the provisions of sub-section (1) or sub-section (2), the company and every officer of the company who is in default shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to three lakh rupees and where the failure is a continuing one, with a further fine which may extend to one thousand rupees for every day, after the first during which the failure continues.

Applicability Applicable w.e.f 01-04-2014 Applicable Rule No. 3, 4,5, 6, 7 & 8 of Companies (Management and Administration) Rules, 2014 Rule - 3. Register of members.- (1) Every company limited by shares shall, from the date of its registration, maintain a register of its members

in Form No. MGT.1:

2

Provided that in the case of existing companies, registered under the Companies Act, 1956, particulars shall be compiled within six months from the date of commencement of these rules.

(2) In the case of a company not having share capital, the register of members shall contain the following particulars, in respect of each member, namely: (a) Name of the member; address (registered office address in case the member is a body corporate);

e-mail address; Permanent Account Number or CIN; Unique Identification Number, if any; Father’s/Mother’s/Spouse’s name; Occupation; Status; Nationality; in case member is a minor, name of the guardian and the date of birth of the member; name and address of nominee;

(b) Date of becoming member; (c) Date of cessation; (d) Amount of guarantee, if any; (e) Any other interest if any; and (f) Instructions, if any, given by the member with regard to sending of notices etc: Provided that in the case of existing companies, registered under the Companies Act, 1956, particulars shall be compiled within six months from the date of commencement of these rules.

Rule - 4. Register of debenture holders or any other security holders.- Every company which issues or allots debentures or any other security shall maintain a separate register of debenture holders or security holders, as the case may be, for each type of debentures or other securities in Form No.MGT.2. Rule - 5. Maintenance of the Register of members etc. under section 88.- Every company shall maintain the registers under clauses (a), (b) and (c) of sub-section (1) of section 88 in the following manner namely:- (1) The entries in the registers maintained under section 88 shall be made within seven days after the Board of

Directors or its duly constituted committee approves the allotment or transfer of shares, debentures or any other securities, as the case may be.

(2) The registers shall be maintained at the registered office of the company unless a special resolution is

passed in a general meeting authorizing the keeping of the register at any other place within the city, town or village in which the registered office is situated or any other place in India in which more than one-tenth of the total members entered in the register of members reside.

(3) Consequent upon any forfeiture, buy-back, reduction, sub-division, consolidation or cancellation of shares,

issue of sweat equity shares, transmission of shares, shares issued under any scheme of arrangements, mergers, reconstitution or employees stock option scheme or any of such scheme provided under this Act

or by issue of duplicate or new share certificates or new debenture or other security certificates, entry shall be made within seven days after approval by the Board or committee, in the register of members or in the respective registers, as the case may be.

(4) If any change occurs in the status of a member or debenture holder or any other security holder whether

due to death or insolvency or change of name or due to transfer to Investor Education Protection Fund or

3

due to any other reason, entries thereof explaining the change shall be made in the respective register.

(5) If any rectification is made in the register maintained under section 88 by the company pursuant to any order passed by the competent authority under the Act, the necessary reference of such order shall be indicated in the respective register.

(6) If any order is passed by any judicial or revenue authority or by Security and Exchange Board of India

(SEBI) or Tribunal attaching the shares, debentures or other securities and giving directions for remittance of dividend or interest, the necessary reference of such order shall be indicated in the respective register.

(7) In case of companies whose securities are listed on a stock exchange in or outside India, the particulars of

any pledge, charge, lien or hypothecation created by the promoters in respect of any securities of the company held by the promoter including the names of pledgee/pawnee and any revocation therein shall be entered in the register within fifteen days from such an event.

(8) If promoters of any listed company, which has formed a joint venture company with another company have

pledged or hypthoticated or created charge or lien in respect of any security of the listed company in connection with such joint venture company, the particulars of such pledge, hypothecation, charge and lien shall be entered in the register members of the listed company within fifteen days from such an event.

Rule - 6. Index of names to be included in Register.- (1) Every register maintained under sub-section (1) of section 88 shall include an index of the names entered in

the respective registers and the index shall, in respect of each folio, contain sufficient indication to enable the entries relating to that folio in the register to be readily found:

Provided that the maintenance of index is not necessary in case the number of members is less than fifty.

(2) The company shall make the necessary entries in the index simultaneously with the entry for allotment or transfer of any security in such Register.

Rule – 7 Foreign register of members, debenture holders, other security holders or beneficial owners

residing outside India.- (1) A company which has share capital or which has issued debentures or any other security may, if so

authorized by its articles, keep in any country outside India, a part of the register of members or as the (2) Case may be, of debenture holders or of any other security holders or of beneficial owners, Resident in

that country (hereafter in this rule referred to as the "foreign register").

(2) The company shall, within thirty days from the date of the opening of any foreign register, file with the Registrar notice of the situation of the office in Form No.MGT.3 along with the fee where such register is kept; and in the event of any change in the situation of such office or of its discontinuance, shall, within thirty days from the date of such change or discontinuance, as the case may be, file notice in Form No.MGT.3 with the Registrar of such change or discontinuance.

(3) A foreign register shall be deemed to be part of the company's register (hereafter in this rule referred to as

the "principal register") of members or of debenture holders or of any other security holders or beneficial

4

owners, as the case may be.

(4) The foreign register shall be maintained in the same format as the principal register. (5) A foreign register shall be open to inspection and may be closed, and extracts may be taken there from and

copies thereof may be required, in the same manner, mutatis mutandis, as is applicable to the principal register, except that the advertisement before closing the register shall be inserted in at least two newspapers circulating in the place wherein the foreign register is kept.

(6) If a foreign register is kept by a company in any country outside India, the decision of the appropriate

competent authority in regard to the rectification of the register shall be binding.

(7) Entries in the foreign register maintained under sub-section (4) of section 88 shall be made simultaneously after the Board of Directors or its duly constituted committee approves the allotment or transfer of shares, debentures or any other securities, as the case may be.

(8) The company shall—

(a) transmit to its registered office in India a copy of every entry in any foreign register within fifteen days after the entry is made; and

(b) Keep at such office a duplicate register of every foreign register duly entered up from time to time. (9) Every such duplicate register shall, for all the purposes of this Act, be deemed to be part of the principal

register.

(10) Subject to the provisions of section 88 and the rules made hereunder, with respect to duplicate registers, the shares or as the case may be, debentures or any other security, registered in any foreign register shall be distinguished from the shares or as the case may be, debentures or any other security, registered in the principal register and in every other foreign register; and no transaction with respect to any shares or as the case may be, debentures or any other security, registered in a foreign register shall, during the continuance of that registration, be registered in any other register.

(11) The company may discontinue the keeping of any foreign register; and thereupon all entries in that

register shall be transferred to some other foreign register kept by the company outside India or to the principal register.

Rule - 8. Authentication.- (1) The entries in the registers maintained under section 88 and index included therein shall be authenticated

by the company secretary of the company or by any other person authorised by the Board for the purpose, and the date of the board resolution authorising the same shall be mentioned.

(2) The entries in the foreign register shall be authenticated by the company secretary of the company or

person authorised by the Board by appending his signature to each entry. Case law No company should enter in the register a statement that it has a lien on the shares of a member w.key & sons

5

Ltd.,(1902) 1 Ch 467 Where a wrong entry creeps into the register of members, it is open to the company to rectify it of its own initiative and without the intervention of the court. Certain shares to register in the name of claimant after the completion of the transfer of certain property. That having been done and the company’s register remaining as it was, the company could have rectified the error of its own. Even without it, the court could proceed on the basis of the facts as proved irrespective of the fact that it would be inconsistent with the entry in the register Michaels v. Harley house (marybone) Ltd (1997) 2 BCLC 166 (ch D): (1999) 2 Comp LJ 466. Notes on clause This clause corresponds to sections 150, 151, 152 and 152A of the Companies Act, 1956 and seeks to provide that every company shall keep and maintain the register of members, register of debenture holders and register of any other security holders. This clause further provides that every register shall include an index of the name. A company, if authorized by its articles, may keep a foreign register outside India. This clause also provides that a company shall file with the Registrar, the particulars and situation of place where the register is to be kept and any changes in the situation of such place. If a company does not maintain the register under this clause the company and every officer of the company who is in default shall be punishable with the fine.

The Companies Act, 1956

Section - 150. Register of members (1) Every company shall keep in one or more books a register of its members, and enter therein the following

particulars : (a) the name and address, and the occupation, if any, of each member ; (b) in the case of a company having a share capital, the shares held by each member, distinguishing each

share by its number except where such shares are held with a depository, and the amount paid or agreed to be considered as paid on those shares ;

(c) the date at which each person was entered in the register as a member ; and (d) the date at which any person ceased to be a member : Provided that where the company has converted any of its shares into stock and given notice of the conversion to the Registrar, the register shall show the amount of stock held by each of the members concerned instead of the shares so converted which were previously held by him.

(2) If default is made in complying with sub-section (1), the company, and every officer of the company who is in default, shall be punishable with fine which may extend to five hundred rupees for every day during which the default continues.

Section - 151. Index of members (1) Every company having more than fifty members shall, unless the register of members is in such a

form as in itself to constitute an index, keep an index (which may be in the form of a card index) of the names of the members of the company and shall, within fourteen days after the date on which any alteration is made in the register of members, make the necessary alteration in the index.

(2) The index shall, in respect of each member, contain a sufficient indication to enable the entries relating to

that member in the register to be readily found.

6

(3) The index shall, at all times, be kept at the same place as the register of members. (4) If default is made in complying with sub-section (1), (2) or (3), the company, and every officer of the

company who is in default, shall be punishable with fine which may extend to five hundred rupees. Section – 152 Register and index of debenture holders (1) Every company shall keep in one or more books a register of the holders of its debentures and enter therein

the following particulars, namely :

(a) the name and address, and the occupation, if any, of each debenture holder ; (b) the debentures held by each holder, distinguishing each debenture by its number except where such

debentures are held with a depository, and the amount paid or agreed to be considered as paid on those debentures ;

(c) the date at which each person was entered in the register as a debenture holder ; and (d) the date at which any person ceased to be a debenture holder.

(2) (a) Every company having more than fifty debenture holders shall, unless the register of debenture holders

is in such a form as in itself to constitute an index, keep an index (which may be in the form of a card index) of the names of the debenture holders of the company and shall, within fourteen days after the date on which any alteration is made in the register of debenture holders, make the necessary alteration in the index.

(b) The index shall, in respect of each debenture holder, contain a sufficient indication to enable the entries

relating to that holder in the register to be readily found.

(3) If default is made in complying with sub-section (1) or (2), on the company, and every officer of the company who is in default, shall be punishable with fine which may extend to five hundred rupees.

(4) Sub-sections (1) to (3) shall not apply with respect to debentures which, ex facie, are payable to the bearer

thereof Section - 152A. Register and index of beneficial owners The register and index of beneficial owners maintained by a depository under section 11 of the Depositories Act, 1996 (22 of 1996), shall be deemed to be an index of members and register and index of debenture holders, as the case may be, for the purposes of this Act. Section – 153 Trusts not to be entered on register No notice of any trust, express, implied or constructive, shall be entered on the register of members or of debenture holders. Section - 153A. Appointment of public trustee (1) The Central Government may, by notification in the Official Gazette, appoint a person as public trustee to

discharge the functions and to exercise the rights and powers conferred on him by or under this Act.

7

(2) The provisions of this section shall not apply on and after the commencement of the Companies

(Amendment) Act, 2000.

Section - 153B. Declaration as to shares and debentures held in trust (1) Notwithstanding anything contained in section 153, where any shares in, or debentures of, a company are

held in trust by any person (herein after referred to as the trustee), the trustee shall, within such time and in such form as may be prescribed, make a declaration to the public trustee.

(2) A copy of the declaration made under sub-section (1) shall be sent by the trustee to the company concerned,

within twenty-one days, after the declaration has been sent to the public trustee. (3) (a) If a trustee fails to make a declaration as required by this section, he shall be punishable with fine which

may extend to five thousand rupees and in the case of a continuing failure, with a further fine which may extend to one hundred rupees for every day during which the failure continues.

(b) If a trustee makes in a declaration aforesaid any statement which is false and which he knows or believes to be false or does not believe to be true, he shall be punishable with imprisonment for a term which may extend to two years and also with fine.

(4) The provisions of this section and section 187B shall not apply in relation to a trust –

(a) Where the trust is not created by instrument in writing ; or (b) Even if the trust is created by instrument in writing, where the value of the shares in, or debentures of,

a company, held in trust -: (i) does not exceed one lakh of rupees, or (ii) exceeds one lakh of rupees but does not exceed either five lakh of rupees or twenty-five per cent of

the paid-up share capital of the company, whichever is less, or (c) where the trust is created to set up a Mutual Fund or Venture Capital Fund or such other fund as may be

approved by the Securities and Exchange Board of India established under sub-section (1) of section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992).

Explanation - The expression "the value of the shares in, or debentures of, a company" in clause (b) means, - (i) In the case of shares or debentures acquired by way of allotment or transfer for consideration, the cost

of acquisition thereof, and (ii) In any other case, the paid-up value of the shares or debentures.

(5) The provisions of this section shall not apply on and after the commencement of the Companies (Amendment) Act, 2000.

Section - 157. Power for company to keep foreign register of members or debentures holders (1) A company which has a share capital or which has issued debentures may, if so authorised by its articles,

keep in any State or country outside India a branch register of members or debenture holders resident in that State or country (in this Act called a "foreign register").

8

(2) The company shall, within thirty days from the date of the opening of any foreign register, file with the

Registrar notice of the situation of the office where such register is kept ; and in the event of any change in the situation of such office or of its discontinuance, shall, within thirty days from the date of such

Change or discontinuance, as the case may be, file notice with the Registrar of such change or discontinuance.

(3) If default is made in complying with the requirements of sub-section (2), the company, and every officer of

the company who is in default, shall be punishable with fine which may extend to 1[five hundred] rupees for every day during which the default continues.

Section - 158. Provisions as to foreign registers (1) A foreign register shall be deemed to be part of the company's register (in this section called the "principal

register") of members or of debenture holders, as the case may be. (2) A foreign register shall be kept, shall be open to inspection and may be closed, and extracts may be taken

there from and copies thereof may be required, in the same manner, mutatis mutandis, as is applicable to the principal register under this Act, except that the advertisement before closing the register shall be inserted in some newspaper circulating in the district wherein the foreign register is kept.

(3) (a) The Central Government may, by notification in the Official Gazette, direct that the provisions of clause

(b) shall apply, or cease to apply, to foreign registers kept in any State or country outside India. (c) If a foreign register is kept by a company in any State or country to which a direction under clause (a)

applies for the time being, the decision of any competent Court in that State or country in regard to the rectification of the register shall have the same force and effect as if it were the decision of a competent Court in India.

(4) The company shall -

(a) transmit to its registered office in India a copy of every entry in any foreign register as soon as may be after the entry is made ; and

(b) keep at such office a duplicate of every foreign register duly entered up from time to time ; (5) Every such duplicate shall, for all the purposes of this Act, be deemed to be part of the principal register.

(6) Subject to the provisions of this section with respect to duplicate registers, the shares or debentures

registered in any foreign register shall be distinguished from the shares or debentures registered in the principal register and in every other foreign register; and no transaction with respect to any shares or debentures registered in a foreign register shall, during the continuance of that registration, be registered in any other register.

(7) The company may discontinue the keeping of any foreign register; and thereupon all entries in that register

shall be transferred to some other foreign register kept by the company in the same part of the world or to the principal register.

(8) Subject to the provisions of this Act, a company may, by its articles, make such regulations as it thinks fit

9

in regard to its foreign registers.

(9) If default is made in complying with sub-section (4), the company, and every officer of the company who is

in default, shall be punishable with fine which may extend to five hundred rupees. Modification 1. Manner of Maintenance of register of members describes in rules 2. Register of members shall indicate separately for each class of equity and preference share members

residing inside or outside India 3. New added: - Register of any other security holders. 4. New added :- If company is authorized by the article keep in any country outside India in prescribed

manner a part of the register referred to in sub-section (1), called “foreign register” 5. Penalty has been increased for The company and every officer who is in default from 500 per day for default

continuous to shall be punishable with fine from fifty thousand rupees to three lakh rupees and if default is a continuing one, then fine which may extend to one thousand rupees for every day as per new act.

Comments In relation to payment of interest and dividend and also To secure the interest of the shareholders of every class, debenture holders and other security holders and also foreign holders proper register of member is maintained in prescribed manner i.e. described in the rules.

10

SECTION – 89 DECLARATION IN RESPECT OF BENEFICIAL INTEREST IN ANY SHARE (1) Where the name of a person is entered in the register of members of a company as the holder of shares in

that company but who does not hold the beneficial interest in such shares, such person shall make a declaration within such time and in such form as may be prescribed to the company specifying the name and other particulars of the person who holds the beneficial interest in such shares.

(2) Every person who holds or acquires a beneficial interest in share of a company shall make a declaration

to the company specifying the nature of his interest, particulars of the person in whose name the shares stand registered in the books of the company and such other particulars as may be prescribed.

(3) Where any change occurs in the beneficial interest in such shares, the person referred to in sub-section

(1) and the beneficial owner specified in sub-section (2) shall, within a period of thirty days from the date of such change, make a declaration to the company in such form and containing such particulars as may be prescribed.

(4) The Central Government may make rules to provide for the manner of holding and disclosing beneficial

interest and beneficial ownership under this section. (5) If any person fails, to make a declaration as required under sub-section (1) or sub-section (2) or

sub-section (3), without any reasonable cause, he shall be punishable with fine which may extend to fifty thousand rupees and where the failure is a continuing one, with a further fine which may extend to one thousand rupees for every day after the first during which the failure continues.

(6) Where any declaration under this section is made to a company, the company shall make a note of such

declaration in the register concerned and shall file, within thirty days from the date of receipt of declaration by it, a return in the prescribed form with the Registrar in respect of such declaration with such fees or additional fees as may be prescribed, within the time specified under section 403.

(7) If a company, required to file a return under sub-section (6), fails to do so before the expiry of the time

specified under the first proviso to sub-section (1) of section 403, the company and every officer of the company who is in default shall be punishable with fine which shall not be less than five hundred rupees but which may extend to one thousand rupees and where the failure is a continuing one, with a further fine which may extend to one thousand rupees for every day after the first during which the failure continues.

(9) No right in relation to any share in respect of which a declaration is required to be made under this section

but not made by the beneficial owner, shall be enforceable by him or by any person claiming through him.

(10) Nothing in this section shall be deemed to prejudice the obligation of a company to pay dividend to its

members under this Act and the said obligation shall, on such payment, stand discharged.

11

Applicability Applicable w.e.f 01-04-2014 Applicable Rule No. 9 of Companies (Management and Administration) Rules, 2014 Rule:- 9. Declaration in respect of beneficial interest in any shares.-

(1) A person whose name is entered in the register of members of a company as the holder of shares in that company but who does not hold the beneficial interest in such shares (hereinafter referred to as “the registered owner”), shall file with the company, a declaration to that effect in Form No.MGT.4 in duplicate, within a period of thirty days from the date on which his name is entered in the register of members of such company:

Provided that where any change occurs in the beneficial interest in such shares, the registered owner shall, within a period of thirty days from the date of such change, make a declaration of such change to the company in Form No.MGT.4 in duplicate.

(2) Every person holding and exempted from furnishing declaration or acquiring a beneficial interest in

shares of a company not registered in his name (hereinafter referred to as “the beneficial owner”) shall file with the company, a declaration disclosing such interest in Form No. MGT.5 in duplicate, within thirty days after acquiring such beneficial interest in the shares of the company:

Provided that where any change occurs in the beneficial interest in such shares, the beneficial owner shall, within a period of thirty days from the date of such change, make a declaration of such change to the company in Form No.MGT.5 in duplicate.

(3) Where any declaration under section 89 is received by the company, the company shall make a note of

such declaration in the register of members and shall file, within a period of thirty days from the date of receipt of declaration by it, a return in Form No.MGT.6 with the Registrar in respect of such declaration with fee. 1"Provided that nothing contained in this rule shall apply in relation to a trust which is created, to set up a Mutual

Fund or Venture Capital Fund or such other fund as may be approved by the Securities and Exchange Board of India".

Notes on clause This clause corresponds to section 187C of the Companies Act, 1956 and seeks to provide that a declaration is to be given to the company by any person who is a member but not holding the beneficial interest in such shares. Further, the person holding beneficial interest shall declare the nature of his interest and other particulars on those shares to the company. Any changes in the beneficial interest are also to be declared. This clause also provides that the company shall make a note of all the declaration made to it and file a return with Registrar. Where a company required to file a return under clause 403 the company and every officer of the company in default shall be punishable with fine.

12

NOTE – 1) Inserted by Companies (Management and administration) Second Amendment Rules, 2014 vide Notification No. G.S.R. 537(E) dated 24.07.2014.

The Companies Act, 1956 Section - 187C. Declaration by persons not holding beneficial interest in any share (1) Notwithstanding anything contained in section 150 , section 153B or section 187B, a person, whose name

is entered, at the commencement of the Companies (Amendment) Act, 1974 (41 of 1974), or at any time thereafter, in the register of members of a company as the holder of a share in that company but who does not hold the beneficial interest in such share, shall, within such time and in such form as may be prescribed, make a declaration to the company specifying the name and other particulars of the person who holds the beneficial interest in such share.

(2) Notwithstanding anything contained elsewhere in this Act, a person who holds a beneficial interest in a

share or a class of shares of a company shall, within thirty days from the commencement of the Companies (Amendment) Act, 1974, or within thirty days after his becoming such beneficial owner, whichever is later, make a declaration to the company specifying the nature of his interest, particulars of the person in whose name the shares stand registered in the books of the company and such other particulars as may be prescribed.

(3) Whenever there is a change in the beneficial interest in such shares the beneficial owner shall, within thirty

days from the date of such change, make a declaration to the company in such form and containing such particulars as may be prescribed.

(4) Notwithstanding anything contained in section 153 where any declaration referred to in sub-section (1),

sub-section (2) or sub-section (3) is made to a company, the company shall make a note of such declaration, in its register of members and shall file, within thirty days from the date of receipt of the declaration by it, a return in the prescribed form with the Registrar with regard to such declaration.

(5)(a) If any person, being required by the provisions of sub-section (1), sub-section (2) or sub-section (3), to

make a declaration, fails, without any reasonable excuse, to do so, he shall be punishable with fine Which may extend to one thousand rupees for every day during which the failure continues .

(b) If a company fails to comply with the provisions of this section, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to one hundred rupees for every day during which the default continues.

(6) Any charge, promissory note or any other collateral agreement, created, executed or entered into in relation

to any share, by the ostensible owner thereof, or any hypothecation by the ostensible owner of any share, in respect of which a declaration is required to be made under the foregoing provisions of this section, but not so declared, shall not be enforceable by the beneficial owner or any person claiming through him.

(7) Nothing in this section shall be deemed to prejudice the obligation of a company to pay dividend in

accordance with the provisions of section 206, and the obligation shall, on such payment, stand discharged.

13

(8) The provisions of this section shall not apply to the trustee referred to in section 187B and after the

commencement of Companies (Amendment) Act, 2000. Rules under companies Act ,1956 Rule - 6B – Section 187C - Every company shall file a return in Form 22B with the Registrar of the declaration made to it in compliance of section 153. Modification 1. If there is any change in the beneficial interest in such shares, not only the beneficial owner has to give

deceleration of such change as per old act but also person whose name is entered in register of members has also make declaration of such change.

2. Now The Central Government is empowered to make rules to provide for the manner of holding and

disclosing beneficial interest and beneficial ownership under this section. 3. Penalty which is under old act for person for not filling declaration is one thousand rupees for every day

during which the failure continues. And for company and officer who is in default is one hundred rupees for every day during which the default continues. And penalty under new act for person Not filing declaration shall be punishable with fine which may extend to fifty thousand rupees and where the failure is a continuing one, with a further fine which may extend to one thousand rupees for every day and for the company, and every officer of the company who is in default, shall be punishable with fine which may extend to Rs 1000 for every day during which the default continues.

Comments Penalty has been made strict.

14

SECTION- 90. INVESTIGATION OF BENEFICIAL OWNERSHIP OF SHARES IN CERTAIN

CASES. Where it appears to the Central Government that there are reasons so to do, it may appoint one or more competent persons to investigate and report as to beneficial ownership with regard to any share or class of shares and the provisions of section 216 shall, as far as may be, apply to such investigation as if it were an investigation ordered under that section. Applicability Applicable w.e.f 01-04-2014 Notes on clause This clause corresponds to section 187D of the Companies Act, 1956 and seeks to provide that the Central Government may appoint one or more competent persons to investigate and report as to the beneficial ownership with regard to any share or class of shares.

The Companies Act, 1956 Section - 187D. Investigation of beneficial ownership of shares in certain cases Where it appears to the Central Government that there are good reasons so to do, it may appoint one or more inspectors to investigate and report as to whether the provisions of section 187C have been complied with regard to any share, and thereupon the provisions of section 247 shall, as far as may be, apply to such investigation as if it were an investigation ordered under that section. Modification Central govt may appoint one or more competent person instead of inspectors to investigate and report. Comments investigation and report by competent person has increased the scope of this section

15

Section 91. POWER TO CLOSE REGISTER OF MEMBERS OR DEBENTURESHOLDERS OR

OTHER SECURITY HOLDERS. (1) A company may close the register of members or the register of debenture holders or the register of other

security holders for any period or periods not exceeding in the aggregate forty-five days in each year, but not exceeding thirty days at any one time, subject to giving of previous notice of at least seven days or such lesser period as may be specified by Securities and Exchange Board for listed companies or the companies which intend to get their securities listed, in such manner as may be prescribed.

(2) If the register of members or of debenture-holders or of other security holders is closed without giving

the notice as provided in sub-section (1), or after giving shorter notice than that so provided, or for a continuous or an aggregate period in excess of the limits specified in that sub-section, the company and every officer of the company who is in default shall be liable to a penalty of five thousand rupees for every day subject to a maximum of one lakh rupees during which the register is kept closed.

Applicability Applicable with effect from 12 September 2013 Applicable Rule No. 10 of Companies (Management and Administration) Rules, 2014 Rule 10. : - Closure of register of members or debenture holders or other security holders. (1) A company closing the register of members or the register of debenture holders or the register of other

security holders shall give at least seven days previous notice and in such manner, as may be specified by Securities and Exchange Board of India, if such company is a listed company or intends to get its securities listed, by advertisement at least once in a vernacular newspaper in the principal vernacular language of the district and having a wide circulation in the place where the registered office of the company is situated, and at least once in English language in an English newspaper circulating in that district and having wide circulation in the place where the registered office of the company is situated and publish the notice on the website as may be notified by the Central Government and on the website, if any, of the Company.

(2) The provisions contained in sub-rule (1) shall not be applicable to a private company provided that the

notice has been served on all members of the private company not less than seven days prior to closure of the register of members or debenture holders or other security holders.

Notes on clause This clause corresponds to section 154 of the Companies Act, 1956 and seeks to provide that a company may close the register of members, debenture holders and other security holders by giving minimum seven days notice or such lesser period as may be specified by SEBI. If default is made in complying with the provisions of this clause the company and every officer of the company shall be punishable with fine.

16

The Companies Act, 1956 Section-154 :- Power to close register of members or debenture holders (1) A company may, after giving not less than seven days' previous notice by advertisement in some newspaper

circulating in the district in which the registered office of the company is situate, close the register of members or the register of debenture holders for any period or periods not exceeding in the aggregate forty-five days in each year, but not exceeding thirty days at any one time.

(2) If the register of members or of debenture holders is closed without giving the notice provided in

sub-section (1), or after giving shorter notice than that so provided, or for a continuous or an aggregate period in excess of the limits specified in that sub-section, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to five thousand rupees for every day during which the register is so closed.

Modification 1. The previous notice of seven days for closing register of members can be reduced as may be specified by

SEBI for listed companies or the companies which intend to get their securities listed. 2. Penalty in both the acts is extended to Rs 5000 per day for default but maximum penalty is subjected one

lakh rupees As per new act Comments In case of emergency company may close its register of members or debenture holders or other security holders by giving notice of less than 7 days as specified by the SEBI. So this advantage for company and chance of attracting penal provision is reduced.

17

Section - 92. ANNUAL RETURN

(1) Every company shall prepare a return (hereinafter referred to as the annual return) in the prescribed form

containing the particulars as they stood on the close of the financial year regarding—

(a) its registered office, principal business activities, particulars of its holding, subsidiary and associate companies;

(b) its shares, debentures and other securities and shareholding pattern; (c) its indebtedness; (d) its members and debenture-holders along with changes therein since the close of the previous financial

year; (e) its promoters, directors, key managerial personnel along with changes therein since the close of the

previous financial year; (f) meetings of members or a class thereof, Board and its various committees along with attendance

details; (g) remuneration of directors and key managerial personnel; (h)penalty or punishment imposed on the company, its directors or officers and details of

compounding of offences and appeals made against such penalty or punishment; (i) matters relating to certification of compliances, disclosures as may be prescribed; (j) details, as may be prescribed, in respect of shares held by or on behalf of the Foreign Institutional

Investors indicating their names, addresses, countries of incorporation, registration and percentage of shareholding held by them; and

(k) such other matters as may be prescribed, and signed by a director and the company secretary, or where there is no company secretary, by a company secretary in practice:

Provided that in relation to One Person Company and small company, the annual return shall be signed by the company secretary, or where there is no company secretary, by the director of the company.

(2) 1“The annual return, filed by a listed company or, by a company having such paid-up capital and turnover as may

be prescribed”, shall be certified by a company secretary in practice in the prescribed form, stating that the annual return discloses the facts correctly and adequately and that the company has complied with all the provisions of this Act.

(3) An extract of the annual return in such form as may be prescribed shall form part of the Board’s report. (4) Every company shall file with the Registrar a copy of the annual return, within sixty days from the date on

which the annual general meeting is held or where no annual general meeting is held in any year within sixty days from the date on which the annual general meeting should have been held together with the statement specifying the reasons for not holding the annual general meeting, with such fees or additional

18

fees as may be prescribed, within the time as specified, under section 403.

(5) If a company fails to file its annual return under sub-section (4), before the expiry of the period specified

under section 403 with additional fee, the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakhs rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both.

(6) If a company secretary in practice certifies the annual return otherwise than in conformity with the

requirements of this section or the rules made there under, he shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees.

Applicability Applicable w.e.f 01 April 2014 Applicable Rule No. 11 & 12 of Companies (Management and Administration) Rules, 2014. Rule – 11 Annual Return (1) Every company shall prepare its annual return in Form No. MGT.7. (2) The annual return, filed by a listed company or a company having paid-up share capital of ten crore rupees

or more or turnover of fifty crore rupees or more, shall be certified by a Company Secretary in practice and the certificate shall be in Form No. MGT.8.

Rule – 12 Extract of annual return. (1) The extract of the annual return to be attached with the Board’s Report shall be in Form No. MGT.9. (2) A copy of the annual return shall be filed with the Registrar with such fee as may be specified for the

purpose. 2

“In General Circular (22 / 2014) :-

a) It is, clarified that Form MGT-7 shall not apply to annual returns in respect of companies whose financial year ended on or before 1st April, 2014 and for annual returns pertaining to earlier years. These companies may file their returns in the relevant Form applicable under the Companies Act, 1956.

b) Companies have also sought clarity about permitting free of cost inspection of records under rule 14(2) ard

rule 16 of the rules cited above and till a fee is prescribed for the purpose in the Articles. It is clarified that until the requisite fee is specified by companies, inspections could be allowed without levy of fee.”

Notes on clause This clause corresponds to sections 159, 161 and 162 of the Companies Act, 1956 and seeks to provide that every company shall prepare an annual return containing certain particulars such as registered office principal business activities, particulars of holding, subsidiary and associate companies, its shares, debentures and other securities, members, promoters, key managerial personnel along with changes therein, penalty or

19

punishment imposed in company directors appeals made against such penalty or punishment details of shares held by or on behalf of Foreign Institutional Investors etc. The annual return shall be signed by a director and a Company Secretary. Where there is no Company Secretary the return shall be signed by the Company Secretary in whole-time practice. In case of a listed company or the company having such paid-up capital and turnover as may be prescribed, Annual return shall be required to be certified by company secretary in practice in the prescribed form. Company secretary in practice shall be punished if he certifies otherwise than in conformity of this section or relevant rules. Note –

1) Substituted by the Companies (Removal of difficulties) Second Order, 2014 S.O. 1177 (E) Dated 29.04.2014. “In Sub-Section (2) of Section 92 of the said Act, for the words “The annual return filed by a listed company or by a Company having such paid-up capital and turnover as may be prescribed” the words “The annual return, filed by a listed Company or by a Company having such paid up capital or3 turnover as may be prescribed” shall be substituted”.

2) General Circular (22/2014) passed by MCA on 25/ 06 /2014 regarding Clarification with regard to format of

annual return applicable for Financial Year 2013-14 and fees to be charged by Companies for allowing inspection of records.

3) As per Notification vide G.S.R. 669(E) dated 28.08.2015 in the companies (Management and

Administration) Amendments Rules, 2015 For Form No. MGT-7.

4) As per Notification vide G.S.R. 737(E) dated 24.09.2015 in the companies (Management and Administration) Second Amendments Rules, 2015 For Form No. MGT-7,

5) As per Notification vide G.S.R. 737(E) dated 16.11.2015 in the companies (Management and

Administration) Third Amendments Rules, 2015 For Form No. MGT-7, The Companies Act, 1956 Section – 159. Annual return to be made by company having a share capital (1) Every company having a share capital shall, within sixty days from the day on which each of the annual

general meetings referred to in section 166 is held, prepare and file with the Registrar a return containing the particulars specified in Part I of Schedule V, as they stood on that day, regarding –

(a) its registered office, (b) the register of its members, (c) the register of its debenture holders, (d) its shares and debentures, (e) its indebtedness, (f) its members and debenture holders, past and present, and (g) its directors, managing directors , managers and secretaries, past and present : Provided that if any of the five immediately preceding returns has given as at the date of the annual general meeting with reference to which it was submitted, the full particulars required as to past and

20

present members and the shares held and transferred by them, the return in question may contain only such of the particulars as relate to persons ceasing to be or becoming members since that date and to shares transferred since that date or to changes as compared with that date in the number of shares held by a member.

Explanation - Any reference in this section or in section 160 or 161 or in any other section or in Schedule V to the day on which an annual general meeting is held or to the date of the annual general meeting shall, where the annual general meeting for any year has not been held, be construed as a reference to the latest day on or before which that meeting should have been held in accordance with the provisions of this Act.

(2) The said return shall be in the form set out in Part II of Schedule V or as near thereto as circumstances admit and where the return is filed even though the annual general meeting has not been held on or before the latest day by which it should have been held in accordance with the provisions of this Act, the company shall file with the return a statement specifying the reasons for not holding the annual general meeting : Provided that where the company has converted any of its shares into stock and given notice of the conversion to the Registrar, the list referred to in paragraph 5 of Part I of Schedule V

Section - 160 Annual return to be made by company not having share capital (1) Every company not having a share capital shall, within sixty days from the day on which each of the annual

general meetings referred to in section 166 is held, prepare and file with the Registrar a return stating the following particulars as they stood on that day : -

(a) the address of the registered office of the company ; (aa) the names of members and the respective dates on which they became members and the names of

persons who ceased to be members since the date of the annual general meeting of the immediately preceding year, and the dates on which they so ceased;

(b) all such particulars with respect to the persons who, at the date of the return, were the directors of the

company , its manager and its secretary as are set out in section 303.

(2) There shall be annexed to the return a statement containing particulars of the total amount of the indebtedness of the company, as on the day aforesaid in respect of all charges which are or were required to be registered with the Registrar under this Act or under any previous companies law, or which would have been required to be registered under this Act if they had been created after the commencement of this Act.

Section – 161 Further provisions regarding annual return and certificate to be annexed thereto (1) The copy of the annual return filed with the Registrar under section 159 or 160, as the case may be, shall be

signed both by a director and by the 1 manager or secretary of the company, or where there is no manager or secretary, by two directors of the company, one of whom shall be the managing director where there is one :

Provided that where the annual return is filed by a company whose shares are listed on a recognised stock exchange, the copy of such annual return shall also be signed by a secretary in whole-time practice.

21

(2) There shall also be filed with the Registrar along with the return a certificate signed by the signatories of

the return, stating – (a) that the return states the facts as they stood on the day of the annual general meeting aforesaid,

correctly and completely ; (aa) that since the date of the last annual return the transfer of all shares and debentures and the issue of all

further certificates of shares and debentures have been appropriately recorded in the books maintained for the purpose ; and

(b) in the case of a private company also, (i) that the company has not, since the date of the annual general meeting with reference to which the last return was submitted, or in the case of a first return, since the date of the incorporation of the company, issued any invitation to the public to subscribe for any shares or debentures of the company, and (ii) that, where the annual return discloses the fact that the number of members of the company exceeds fifty, the excess consists wholly of persons who under sub-clause (b) of clause (iii) of sub-section (1) of section 3 are not to be included in reckoning the number of fifty.

Section – 162. Penalty and interpretation (1) If a company fails to comply with any of the provisions contained in section 159, 160 or 161. The

company, and every officer of the company who is in default, shall be punishable with fine which may extend to five hundred rupees for every day during which the default continues.

(2) For the purposes of this section and sections 159, 160 and 161, the expressions "officer" and "director"

shall include any person in accordance with whose directions or instructions the Board of directors of the company is accustomed to act.

Rules under companies Act ,1956 Rule - 6A - Every company having a share capital shall file the annual return with the Registrar together with the Form 20B. Modification 1. Any Reference to annual return is now described in rules not in the schedule V. 2. New particulars added for providing description like, key managerial personnel; Remuneration of directors

& KMP; Promoters, directors, Penalty or punishment imposed on company; details in respect of shares held by foreign Institutional Investors.

3. Earlier annual return was signed by 2 persons 1. Director and 2. Manager or secretary. If there is no manager

then by 2 director. One of them should be MD. And under new act Annual Return is to be signed director or Company secretary if there is no company secretary then by Company secretary in practice. In case One person company annual return is too signed by Company secretary or if there is no company secretary then it is to be signed by Director.

4. Annual return of the listed companies or companies with prescribed paid- up capital and turnover, annual

22

return shall also be certified by company secretary in practice.

5. Companies whether having share capital or not have to comply with requirements of filling annual return. 6. (a) Penalty for company fine minimum fifty thousand rupees which may be extended to 5 lakh rupees

b) Penalty for every officer of the company who is in default shall be punishable with fine fifty thousand rupees but which may extend to five lakh rupees, or six month imprisonment or both.

(c) For company secretary in practice who certified the annual return shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees.

Comments Inclusion of disclosure of new particulars and increased penalty has increased transparency for the shareholders and there will be less chance of fraud.

23

SECTION – 93. RETURN TO BE FILED WITH REGISTRAR IN CASE PROMOTERS’ STAKE

CHANGES Every listed company shall file a return in the prescribed form with the Registrar with respect to change in the number of shares held by promoters and top ten shareholders of such company, within fifteen days of such change. Notes on clause This is a new clause which seeks to provide that in case of change in number of shares held by promoters and top ten shareholders in a listed company, then such company shall file a return with the Registrar about such change. Applicability Applicable w.e.f 01 April 2014 Applicable Rule No. 13 of Companies (Management and Administration) Rules, 2014. Rule – 13 . Return of changes in shareholding position of promoters and top ten shareholders. Every listed company shall file with the Registrar, a return in Form No.MGT.10 along with the fee with respect to changes relating to either increase or decrease of two percent, or more in the shareholding position of promoters and top ten shareholders of the company in each case, “either value or volume of the shares”, within fifteen days of such change. NOTE :-

• Words “either value or volume of the shares” omitted by companies (Management and Administration) Second Amendment Rules, 2014 vide Notification No. G.S.R. 537(E), dated 24.07.2014.

• Omitted by Companies (Management and Administration) Second Amendment Rules, 2014 vide Notification No. G.S.R. 537(E), dated 24.07.2014. Prior to omission, it read as: “Explanation - For the purpose of this sub-rule, the “change” means increase or decrease by two percent or more in the shareholding of each of the promoters and each of the top ten shareholders of the company.”

24

Section – 94. PLACE OF KEEPING AND INSPECTION OF REGISTERS, RETURNS, ETC.

(1) The registers required to be kept and maintained by a company under section 88 and copies of the annual

return filed under section 92 shall be kept at the registered office of the company: Provided that such registers or copies of return may also be kept at any other place in India in which more than one-tenth of the total number of members entered in the register of members reside, if approved by a special resolution passed at a general meeting of the company and the Registrar has been given a copy of the proposed special resolution in advance: Provided further that the period for which the registers, returns and records are required to be kept shall be such as may be prescribed.

(2) The registers and their indices, except when they are closed under the provisions of this Act, and the copies of all the returns shall be open for inspection by any member, debenture-holder, other security holder or beneficial owner, during business hours without payment of any fees and by any other person on payment of such fees as may be prescribed.

(3) Any such member, debenture-holder, other security holder or beneficial owner or any other person

may— (a) take extracts from any register, or index or return without payment of any fee; or (b) Require a copy of any such register or entries therein or return on payment of such fees as may be prescribed.

(4) If any inspection or the making of any extract or copy required under this section is refused, the company

and every officer of the company who is in default shall be liable, for each such default, to a penalty of one thousand rupees for every day subject to a maximum of one lakh rupees during which the refusal or default continues.

(5) The Central Government may also, by order, direct an immediate inspection of the document, or direct that

the extract required shall forthwith be allowed to be taken by the person requiring it. Applicability Applicable w.e.f 01 April 2014 Applicable Rule no. 14, 15, & 16 of Companies (Management and Administration) Rules, 2014. Rule – 14. Inspection of registers, returns etc. (1) The registers and indices maintained pursuant to section 88 and copies of returns prepared pursuant to

section 92, shall be open for inspection during business hours, at such reasonable time on every working

25

day as the board may decide, by any member, debenture holder, other security holder or beneficial owner without payment of fee and by any other person on payment of such fee as may be specified in the articles of association of the company but not exceeding fifty rupees for each inspection.

Explanation - For the purposes of this sub-rule, reasonable time of not less than two hours on every working day shall be considered by the company.

(2) Any such member, debenture holder, security holder or beneficial owner or any other person may require a

copy of any such register or entries therein or return on payment of such fee as may be specified in the articles of association of the company but not exceeding ten rupees for each page. Such copy or entries or return shall be supplied within seven days of deposit of such fee.

Rule – 15. Preservation of register of members etc. and annual return. (1) The register of members along with the index shall be preserved permanently and shall be kept in the

custody of the company secretary of the company or any other person authorized by the Board for such purpose; and

(2) The register of debenture holders or any other security holders along with the index shall be preserved for a

period of eight years from the date of redemption of debentures or securities, as the case may be, and shall be kept in the custody of the company secretary of the company or any other person authorized by the Board for such purpose.

(3) Copies of all 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 Registrar.

(4) The foreign register of members shall be preserved permanently, unless it is discontinued and all the entries

are transferred to any other foreign register or to the principal register. Foreign register of debenture holders or any other security holders shall be preserved for a period of eight years from the date of redemption of such debentures or securities.

(5) The foreign register shall be kept in the custody of the company secretary or person authorised by the

Board. (6) A copy of the proposed special resolution in advance to be filed with the registrar as required in accordance

with first proviso of sub-section (1) of section 94, shall be filed with the Registrar, at least one day before the date of general meeting of the company in Form No.MGT.14.

Rule – 16. Copies of the registers and annual return. Copies of the registers maintained under section 88 or entries therein and annual return filed under section 92 shall be furnished to any member, debenture-holder, other security holder or beneficial owner of the company or any other person on payment of such fee as may be specified in the Articles of Association of the company but not exceeding rupees ten for each page and such copy shall be supplied by the company within a period of seven days from the date of deposit of fee to the company.

26

Notes on clause This clause corresponds to section 163 of the Companies Act, 1956 and seeks to provide that register of members, debenture holders and any other security holders and copies of annual returns shall be kept at the registered office and can also be kept at any place other than registered office where more than one-tenth of total number of members reside, if approved by special resolution. The clause provides for Central Government to have power to prescribe rules for the period for which the registers, returns, records etc. Have to be kept. This clause further provides that the registers and the indices shall be open to inspection and any person can take extracts during any business hours without payment of any fee or can also get copies thereof with payment of fee and if it is refused the company and every officer of the company shall be punishable with fine . The Central Government may by order direct inspection of documents and to have an extract or copy of such registers by any person.

The Companies Act, 1956 Section – 163. Place of keeping and inspection of registers and returns (1) The register of members commencing from the date of the registration of the company, the index of

members, the register and index of debenture holders, and copies of all annual returns prepared under sections 159 and 160, together with the copies of certificates and documents required to be annexed thereto under sections 160 and 161, shall be kept at the registered office of the company :

Provided that such registers, indexes, returns and copies of certificates and documents or any or more of

them may, instead of being kept at the registered office of the company, be kept at any other place within the city, town or village in which the registered office is situate, if -

(i) such other place has been approved for this purpose by a special resolution passed by the company in general meeting, and

(ii) [Omitted by the Companies (Amendment) Act, 1965, with effect from 15-10-1965], (iii) The Registrar has been given in advance a copy of the proposed special resolution. (1A) Notwithstanding anything contained in sub-section (1), the Central Government may make rules for the

preservation and for the disposal, whether by destruction or otherwise, of the registers, indexes, returns and copies of certificates and other documents referred to in sub- section (1)

(2) The registers, indexes, returns, and copies of certificates and other documents referred to in sub-section (1)

shall, except when the register of members or debenture holders is closed under the provisions of this Act, be open during business hours (subject to such reasonable restrictions, as the company may impose, so that not less than two hours in each day are allowed for inspection) to the inspection – (a) of any member or debenture holder, without fee ; and (b) of any other person, on payment of such sum as may be prescribed for each inspection.

(3) any such member, debenture holder or other person may –

(a) make extracts from any register, index, or copy referred to in sub- section (1) without fee or additional fee, as the case may be ; or

(b) Require a copy of any such register, index or copy or of any part thereof, on payment of 2[such sum as may be prescribed] for every one hundred words or fractional part thereof required to be copied.

27

(4) The company shall cause any copy required by any person under clause (b) of sub-section (3) to be sent to that person within a period of ten days, exclusive of non-working days, commencing on the day next after the day on which the requirement is received by the company.

(5) If any inspection, or the making of any extract required under this section, is refused, or if any copy

required under this section is not sent within the period specified in sub-section (4), the company, and every officer of the company who is in default, shall be punishable, in respect of each offence, with fine which may extend to five hundred rupees for every day during which the refusal or default continues.

(5) The Central Government may also, by order, compel an immediate inspection of the document, or direct

that the extract required shall forthwith be allowed to be taken by the person requiring it, or that the copy required shall forthwith be sent to the person requiring it, as the case may be.

Modification 1. Registers or copies of return may be kept at any other place in India in which more than one-tenth of the

total number of members entered in the register of members resides. 2. Earlier central govt. was empowered to make rules for preservation and disposal or otherwise for registers,

indexes, returns etc but now period for which the registers, returns and records are required to be kept shall be such as prescribed in the rules.

3. Under new act in addition to member, debenture-holder, other security holders have also been empowered to

inspect, take extract from the register of members 4. Under new act the company and every officer of the company who is in default shall be punishable, with

penalty of one thousand rupees for every day subject to a maximum of one lakh rupees during which the refusal or default continues. Under old act penalty was five hundred rupees for every day during which the refusal or default continues.

Comments It is advantage for the company that preservation of registers, returns and records are required to be kept shall be such as prescribed in the rules which was earlier was empowered by central govt. And company may after proper analysis keep its registers or copies of return at place any where in India where the majority shareholders of the company reside or where maximum complaints related to inspection arise.

28

Section – 95. REGISTER ETC. TO BE EVIDENCE. The registers, their indices and copies of annual returns maintained under sections 88 and 94 shall be prima facie evidence of any matter directed or authorised to be inserted therein by or under this Act Notes on clause This clause corresponds to section 164 of the Companies Act, 1956 and seeks to provide that the registers, indices and copies of annual return shall be prima facie evidence of any matter.

The Companies Act, 1956 Section – 164. Registers, etc., to be evidence The register of members, the register of debenture holders, and the annual returns, certificates and statements referred to in sections 159, 160 and 161 shall be prima facie evidence of any matters directed or authorised to be inserted therein by this Act. Applicability Applicable w.e.f 01-04-2014 Modification Earlier The registers, their indices and copies of annual returns maintained refer to section 159, 160 and 161 of old act and now refer to sections 88 and 94 in the new act.

29

Section – 96. ANNUAL GENERAL MEETING (1) Every company other than a One Person Company shall in each year hold in addition to any other

meetings, a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it, and not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next: Provided that in case of the first annual general meeting, it shall be held within a period of nine months from the date of closing of the first financial year of the company and in any other case, within a period of six months, from the date of closing of the financial year: Provided further that if a company holds its first annual general meeting as aforesaid, it shall not be necessary for the company to hold any annual general meeting in the year of its incorporation: Provided also that the Registrar may, for any special reason, extend the time within which any annual general meeting, other than the first annual general meeting, shall be held, by a period not exceeding three months.

(2) Every annual general meeting shall be called during business hours, that is, between 9 a.m. and 6 p.m. on

any day that is not a National Holiday and shall be held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situate:

Provided that the Central Government may exempt any company from the provisions of this sub-section subject to such conditions as it may impose. Explanation - For the purposes of this sub-section, “National Holiday” means and includes a day declared as National Holiday by the Central Government

Applicability Applicable w.e.f 01-04-2014 Notes on clause This clause corresponds to section 166 of the Companies Act, 1956 and seeks to provide for that every company other than One Person Company in addition to any other meeting shall hold a general meeting as its annual general meeting. There should not be a gap of more than fifteen months between two annual general meetings. This clause further provides that first annual general meeting shall be held within a period of nine months from the closing of first financial year and within a period of six months of closure of financial years in all other cases. This clause also provides that annual general meeting shall be called on any day which is not a National Holiday and may be held either at registered office of a company or at some other place within the City, town or village where the registered office of the company is situated. The clause defines the term ‘National Holiday’. The Central Government may exempt any company from compliance of this clause subject

30

to any conditions.

The Companies Act, 1956 Section – 165. Statutory meeting and statutory report of company (1) Every company limited by shares, and every company limited by guarantee and having a share capital,

shall, within a period of not less than one month nor more than six months from the date at which the company is entitled to commence business, hold a general meeting of the members of the company, which shall be called "the statutory meeting".

(2) The Board of directors shall, at least twenty-one days before the day on which the meeting is held, forward

a report (in this Act referred to as "the statutory report") to every member of the company :

Provided that if the statutory report is forwarded later than is required above, it shall, notwithstanding that fact, be deemed to have been duly forwarded if it is so agreed to by all the members entitled to attend and vote at the meeting.

(3) The statutory report shall set out – (a) the total number of shares allotted, distinguishing shares allotted as fully or partly paid-up otherwise

than in cash, and stating in the case of shares partly paid-up, the extent to which they are so paid-up, and in either case, the consideration for which they have been allotted ;

(b) the total amount of cash received by the company in respect of all the shares allotted, distinguished as aforesaid ;

(c) an abstract of the receipts of the company and of the payments made thereout, up to a date within seven days of the date of the report, exhibiting under distinctive headings the receipts of the company from shares and debentures and other sources, the payments made thereout, and particulars concerning the balance remaining in hand, and an account or estimate of the preliminary expenses of the company, showing separately any commission or discount paid or to be paid on the issue or sale of shares or debentures ;

(d) the names, addresses and occupations of the directors of the company and of its auditors ; and also, if there be any, of its 1[***] manager and secretary ; and the changes, if any, which have occurred in such names, addresses and occupations since the date of the incorporation of the company ;

(e) the particulars of any contract which, or the modification or the proposed modification of which, is to be submitted to the meeting for its approval together in the latter case with the particulars of the modification or proposed modification

(f) The extent, if any, to which each underwriting contract. If any, has not been carried out, and the reasons therefore ;

(g) the arrears, if any, due on calls from every director and from the manager ; and (h) The particulars of any commission or brokerage paid or to be paid in connection with the issue or sale

of shares or debentures to any director or to the manager.

(4) The statutory report shall be certified as correct by not less as two directors of the company one of whom shall be a managing director, where there is one. After the statutory report has been certified as aforesaid, the auditors of the company shall, insofar as the report relates to the shares allotted by the company, the

31

cash received in respect of such shares and the receipts and payments of the company certify it as correct.

(5) The Board shall cause a copy of the statutory report certified as is required by this section to be delivered to

the Registrar for registration forthwith, after copies thereof have been sent to the members of the company. (6) The Board shall cause a list showing the names, addresses and occupations of the members of the company,

and the number of shares held by them respectively, to be produced at the commencement of the statutory meeting, and to remain open and accessible to any member of the company during the continuance of the meeting.

(7) The members of the company present at the meeting shall be at liberty to discuss any matter relating to the

formation of the company or arising out of the statutory report, whether previous notice has been given or not; but no resolution may be passed of which notice has not been given in accordance with the provisions of this Act.

(8) The meeting may adjourn from time to time, and at any adjourned meeting, any resolution of which notice

has been given in accordance with the provisions of this Act, whether before or after the former meeting, may be passed ; and the adjourned meeting shall have the same powers as an original meeting.

(9) If default is made in complying with the provisions of this section, every director or other officer of the

company who is in default shall be punishable with fine which may extend to 3[five thousand] rupees.

(10) This section shall not apply to a private company Section – 166. Annual general meeting (1) Every company shall in each year hold in addition to any other meetings a general meeting as its annual

general meeting and shall specify the meeting as such in the notices calling it ; and not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next : Provided that a company may hold its first annual general meeting within a period of not more than eighteen months from the date of its incorporation ; and if such general meeting is held within that period, it shall not be necessary for the company to hold any annual general meeting in the year of its incorporation or in the following year : Provided further that the Registrar may, for any special reason, extend the time within which any annual general meeting (not being the first annual general meeting) shall be held, by a period not exceeding three months.

(2) Every annual general meeting shall be called for a time during business hours, on a day that is not a public

holiday, and shall be held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situate :

Provided that the Central Government may exempt any class of companies from the provisions of this sub-section subject to such conditions as it may impose :

32

Provided further that - (a) A public company or a private company which is a subsidiary of a public company, may by its articles

fix the time for its annual general meetings and may also by a resolution passed in one annual general meeting fix the time for its subsequent annual general meetings ; and

(b) An private company which is not a subsidiary of a public company, may in like manner and also by a

resolution agreed to by all the members thereof, fix the times as well as the place for its annual general meeting.

1“Provided further that the time. Date and place of each annual general meeting arc decided upon before-hand by

the board of directors having regard to the directions, if any, given in this regard by the company in its general meeting.”

Section – 170 Sections 171 to 186 to apply to meetings (1) The provisions of sections 171 to 186 –

(i) Shall, notwithstanding anything to the contrary in the articles of the company, apply with respect to general meetings of a public company, and of a private company which is a subsidiary of a public company ; and

(ii) Shall, unless otherwise specified therein or unless the articles of the company otherwise provide, apply with respect to general meetings of a private company which is not a subsidiary of a public company.

(2)(a) Section 176, with such adaptations and modifications, if any, as may be prescribed, shall apply with

respect to meetings of any class of members, or of debenture holders or any class of debenture holders, of a company, in like manner as it applies with respect to general meetings of the company.

(b) Unless the articles of the company or a contract binding on the persons concerned otherwise provide, sections 171 to 175 and sections 177 to 186 with such adaptations and modifications, if any, as may be prescribed, shall apply with respect to meetings of any class of members, or of debenture holders or any class of debenture holders, of a company, in like manner as they apply with respect to general meetings of the company.

NOTE :- 1) As per the Notification G.S.R. 466 (E) Dated 05/06/2015, In sub-section (2) of sec 96 , after the proviso and before

the explanation, the abovementioned proviso shall be inserted,

Modification 1. One person company is not required to hold annual general meeting. 2. As per new act the first annual general meeting of the company is to be held within a period of nine months from the date of closing of the first financial year of the company and as per old act the first annual general meeting of the company is to be held within eighteen months from the date of its incorporation. 3. Timing of business hours described in new act that is, between 9 a.m. and 6 p.m. on any day that is not a

33

National Holiday. 4. Words “public holiday” is substituted with the word “National Holiday” this means AGM cannot be held of national holiday. Comments It is advantage for the company with substitute of word public holiday with national holiday this means now company can even hold its AGM on Sunday.

34

Section – 97. POWER OF TRIBUNAL TO CALL ANNUAL GENERAL MEETING (1) If any default is made in holding the annual general meeting of a company under section 96, the Tribunal

may, notwithstanding anything contained in this Act or the articles of the company, on the application of any member of the company, call, or direct the calling of, an annual general meeting of the company and give such ancillary or consequential directions as the Tribunal thinks expedient:

Provided that such directions may include a direction that one member of the company present in person or by proxy shall be deemed to constitute a meeting.

(2) A general meeting held in pursuance of sub-section (1) shall, subject to any directions of the Tribunal, be

deemed to be an annual general meeting of the company under this Act. Applicability Not yet applicable Notes on clause This clause corresponds to section 167 of the Companies Act, 1956 and seeks to provide that in case of any default in holding annual general meeting of a company, the Tribunal on the application of any member of the company, call or direct the calling of an annual general meeting. The Tribunal may also direct that one member of the company present in person or by proxy shall be deemed to constitute a meeting. The Companies Act, 1956 Section – 167. Power of central government to call annual general meeting (1) If default is made in holding an annual general meeting in accordance with section 166, the Central

Government may, notwithstanding anything contained in this Act or in the articles of the company, on the application of any member of the company, call, or direct the calling of, a general meeting of the company and give such ancillary or consequential directions as the Central Government thinks expedient in relation to the calling, holding and conducting of the meeting.

Explanation - The directions that may be given under this sub-section may include a direction that one member of the company present in person or by proxy shall be deemed to constitute a meeting.

(2) A general meeting held in pursuance of sub-section (1) shall, subject to any directions of the Central Government, be deemed to be an annual general meeting of the company :

Provided that in the case of revival and rehabilitation of sick industrial companies under Chapter VIA, the provisions of this section, shall have effect as if for the words "Central Government", the word "Tribunal" had been substituted.

Modification

35

Now Instead of central government “Tribunal” is empowered to call Annual General Meeting on the application of any member of the company, call, or direct the calling of AGM. Section – 98. POWER OF TRIBUNAL TO CALL MEETINGS OF MEMBERS, ETC. (1) If for any reason it is impracticable to call a meeting of a company, other than an annual general meeting,

in any manner in which meetings of the company may be called, or to hold or conduct the meeting of the company in the manner prescribed by this Act or the articles of the company, the Tribunal may, either suo motu or on the application of any director or member of the company who would be entitled to vote at the meeting,— (a) order a meeting of the company to be called, held and conducted in such manner as the Tribunal thinks

fit; and (b) give such ancillary or consequential directions as the Tribunal thinks expedient, including directions

modifying or supplementing in relation to the calling, holding and conducting of the meeting, the operation of the provisions of this Act or articles of the company:

Provided that such directions may include a direction that one member of the company present in person or by proxy shall be deemed to constitute a meeting.

(2) Any meeting called, held and conducted in accordance with any order made under sub-section (1) shall, for

all purposes, be deemed to be a meeting of the company duly called, held and conducted. Applicability Not yet applicable Notes on clause This clause corresponds to section 186 of the Companies Act, 1956 and seeks to provide that if for any reason, it is impracticable to call a meeting of a company other than an annual general meeting, the Tribunal shall have the power to order for calling the meeting either suo motu or on the application of any director of the company or of any member of a company Companies Act , 1956 Section – 186. Power of tribunal to order meeting to be called (1) If for any reason it is impracticable to call a meeting of a company, other than an annual general meeting,

in any manner in which meetings of the company may be called, or to hold or conduct the meeting of the company in the manner prescribed by this Act or the articles, the Tribunal may, either of its own motion or on the application of any director of the company, or of any member of the company who would be entitled to vote at the meeting,-

(a) order a meeting of the company to be called, held and conducted in such manner as the Tribunal thinks fit ; and

(b) give such ancillary or consequential directions as the Tribunal thinks expedient, including directions modifying or supplementing in relation to the calling, holding and conducting of the meeting, the operation of the provisions of this Act and of the company's articles.

36

Explanation - The directions that may be given under this sub-section may include a direction that one member of the company present in person or by proxy shall be deemed to constitute a meeting.

(2) Any meeting called, held and conducted in accordance with any such order shall, for all purposes, be

deemed to be a meeting of the company duly called, held and conducted. Modification There is no such change in the section in both the acts Tribunal has the power to call the meeting.

37

Section–99. PUNISHMENT FOR DEFAULT IN COMPLYING WITH PROVISIONS OF

SECTIONS 96 TO 98 If any default is made in holding a meeting of the company in accordance with section 96 or section 97 or section 98 or in complying with any directions of the Tribunal, the company and every officer of the company who is in default shall be punishable with fine which may extend to one lakh rupees and in the case of a continuing default, with a further fine which may extend to five thousand rupees for every day during which such default Continues. Applicability Not yet Applicable Notes on clause This clause corresponds to section 168 of the Companies Act, 1956 and seeks to provide that if any default is made in holding a general meeting of the company or in complying with any directions of the Tribunal, the company and every officer of the company who is in default shall be punishable with fine. The Companies Act, 1956 Section – 168. Penalty for default in complying with section 166 or 167 If default is made in holding a meeting of the company in accordance with section 166, or in complying with any directions of the Tribunal or the Central Government, as the case may be under sub-section (1) of section 167, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to fifty thousand rupees and in the case of a continuing default, with a further fine which may extend to two thousand five hundred rupees for every day after the first during which such default continues. Modification Now only Tribunal has the power to give the direction regarding the meeting and imposing penalty in case of default by the company. Comments Separate statutory Authority i.e. Tribunal has been established for to resolve the issues of stakeholder in expeditious manner.

38

Section – 100. CALLING OF EXTRAORDINARY GENERAL MEETING (1) The Board may, whenever it deems fit, call an extraordinary general meeting of the company. (2) The Board shall, at the requisition made by,—

(a) in the case of a company having a share capital, such number of members who hold, on the date of the receipt of the requisition, not less than one-tenth of such of the paid-up share capital of the company as on that date carries the right of voting;

(b) in the case of a company not having a share capital, such number of members who have, on the date of receipt of the requisition, not less than one-tenth of the total voting power of all the members having on the said date a right to vote, call an extraordinary general meeting of the company within the period specified in subsection (4)

(3) The requisition made under sub-section (2) shall set out the matters for the consideration of which the

meeting is to be called and shall be signed by the requisitionists and sent to the registered office of the company.

(4) If the Board does not, within twenty-one days from the date of receipt of a valid requisition in regard to

any matter, proceed to call a meeting for the consideration of that matter on a day not later than forty-five days from the date of receipt of such requisition, the meeting may be called and held by the requisitonists themselves within a period of three months from the date of the requisition.

(5) A meeting under sub-section (4) by the requisitionists shall be called and held in the same manner in which

the meeting is called and held by the Board. (6) Any reasonable expenses incurred by the requisitionists in calling a meeting under sub-section (4) shall be

reimbursed to the requisitionists by the company and the sums so paid shall be deducted from any fee or other remuneration under section 197 payable to such of the directors who were in default in calling the meeting.

Applicability Applicable with effect from 12 September 2013 except sub sec (6) sub sec (6) Applicable w.e.f 01 April 2014

Applicable Rule No. 17 of Companies (Management and Administration) Rules, 2014. Rule – 17. Calling of Extraordinary general meeting by requistionists. (1)The members may requisition convening of an extraordinary general meeting in accordance with

sub-section (4) of section 100, by providing such requisition in writing or through electronic mode at least clear twenty-one days prior to the proposed date of such extraordinary general meeting.

39

(2)The notice shall specify the place, date, day and hour of the meeting and shall contain the business to be

transacted at the meeting.- Explanation - For the purposes of this sub-rule, it is here by clarified that requistionists should convene

meeting at Registered office or in the same city or town where Registered office is situated and such meeting should be convened on working day.

(3) If the resolution is to be proposed as a special resolution, the notice shall be given as required by

sub-section (2) of section 114. (4) The notice shall be signed by all the requistionists or by a requistionists duly authorized in writing by all

other requistionists on their behalf or by sending an electronic request attaching therewith a scanned copy of such duly signed requisition.

(5) No explanatory statement as required under section 102 need be annexed to the notice of an extraordinary

general meeting convened by the requistionists and the requistionists may disclose the reasons for the resolution(s) which they propose to move at the meeting.

(6) The notice of the meeting shall be given to those members whose names appear in the Register of members

of the company within three days on which the requistionists deposit with the Company a valid requisition for calling an extraordinary general meeting.

(7) Where the meeting is not convened, the requistionists shall have a right to receive list of members together

with their registered address and number of shares held and the company concerned is bound to give a list of members together with their registered address made as on twenty first day from the date of receipt of valid requisition together with such changes, if any, before the expiry of the forty-five days from the date of receipt of a valid requisition.

(8) The notice of the meeting shall be given by speed post or registered post or through electronic mode. Any

accidental omission to give notice to or the non-receipt of such notice by, any member shall not invalidate the proceedings of the meeting.

Notes on clause This clause corresponds to section 169 of the Companies Act, 1956 and seeks to provide that the Board may call an extraordinary general meeting on its own and shall call such meeting in case of company having share capital on a request from such number of members holding not less than one-tenth of paid-up capital of the company. In case of company not having a share capital, such number of members having not less than one-tenth of the total voting power of all the members may call an extraordinary general meeting. In case the Board does not call the meeting within twenty-one days, requisitionists may call the meeting. This clause further provides that any reasonable expenses incurred by the requisitionists shall be reimbursed.

The Companies Act, 1956

Section – 169. Calling of extraordinary general meeting on requisition

40

(1) The Board of directors of a company shall, on the requisition of such number of members of the company

as is specified in sub-section (4), forthwith proceed duly to call an extraordinary general meeting of the company.

(2) The requisition shall set out the matters for the consideration of which the meeting is to be called, shall be

signed by the requisitionists, and shall be deposited at the registered office of the company.

(3) The requisition may consist of several documents in like form, each signed by one or more requisitionists.

(4) The number of members entitled to requisition a meeting in regard to any matter shall be - (a) in the case of a company having a share capital, such number of them as hold at the date of the deposit of

the requisition, not less than one-tenth of such of the paid-up capital of the company as at that date carries the right of voting in regard to that matter ;

(b) in the case of a company not having a share capital, such number of them as have at the date of deposit of the requisition not less than one-tenth of the total voting power of all the members having at the said date a right to vote in regard to that matter.

(5) Where two or more distinct matters are specified in the requisition, the provisions of sub-section (4) shall

apply separately in regard to each such matter; and the requisition shall accordingly be valid only in respect of those matters in regard to which the condition specified in that sub-section is fulfilled.

(6) If the Board does not, within twenty-one days from the date of the deposit of a valid requisition in regard to

any matters, proceed duly to call a meeting for the consideration of those matters on a day not later than forty-five days from the date of the deposit of the requisition, the meeting may be called – (a) by the requisitionists themselves ; (b) in the case of a company having a share capital, by such of the requisitionists as represent either a

majority in value of the paid-up share capital held by all of them or not less than one-tenth of such of the paid-up share capital of the company as is referred to in clause (a) of sub-section (4), whichever is less ; or

(c) in the case of a company not having a share capital, by such of the requisitionists as represent not less than one-tenth of the total voting power of all the members of the company referred to in clause (b) of sub-section (4).

Explanation - For the purposes of this sub-section, the Board shall, in the case of a meeting at which a

resolution is to be proposed as a special resolution, be deemed not to have duly convened the meeting if they do not give such notice thereof as is required by sub-section (2) of section 189.

(7) A meeting called under sub-section (6) by the requisitionists or any of them –

(a) shall be called in the same manner, as nearly as possible, as that in which meetings are to be called by the Board ; but (b) shall not be held after the expiration of three months from the date of the deposit of the requisition. Explanation - Nothing in clause (b) shall be deemed to prevent a meeting duly commenced before the expiry of the period of three months aforesaid, from adjourning to some day after the expiry of that period.

41

(8) Where two or more persons hold any shares or interest in a company jointly, a requisition, or a notice calling a meeting, signed by one or some only of them shall, for the purposes of this section, have the same force and effect as if it had been signed by all of them.

(9) Any reasonable expenses incurred by the requisitionists by reason of the failure of the Board duly to call a

meeting shall be repaid to the requisitionists by the company; and any sum so repaid shall be retained by the company out of any sums due or to become due from the company by way of fees or other remuneration for their services to such of the directors as were in default.

Modification Sub section (5) of section sec 169 under old act deleted Comments This section in the new act has been simplified and easy to understand.

42

Section – 101. NOTICE OF MEETING.

(1) A general meeting of a company may be called by giving not less than clear 1“Fourteen days’” notice either

in writing or through electronic mode in such manner as may be prescribed: Provided that a general meeting may be called after giving a shorter notice if consent is given in writing or by electronic mode by not less than ninety-five per cent. of the members entitled to vote at such meeting.

(2) Every notice of a meeting shall specify the place, date, day and the hour of the meeting and shall contain a statement of the business to be transacted at such meeting.

(3) The notice of every meeting of the company shall be given to—:

(a) every member of the company, legal representative of any deceased member or the assignee of an insolvent member;

(b) the auditor or auditors of the company; and (c) Every director of the company.

(4) Any accidental omission to give notice to, or the non-receipt of such notice by, any member or other person who is entitled to such notice for any meeting shall not invalidate the proceedings of the meeting.

Applicability Applicable w.e.f 01-04-2014

Applicable Rule No. 18 of Companies (Management and Administration) Rules, 2014. Rule – 18. Notice of the meeting. (1) A company may give notice through electronic mode.

Explanation - For the purpose of this rule, the expression ‘‘electronic mode’’ shall mean any communication sent by a company through its authorized and secured computer programme which is capable of producing confirmation and keeping record of such communication addressed to the person entitled to receive such communication at the last electronic mail address provided by the member.

(2) A notice may be sent through e-mail as a text or as an attachment to e-mail or as a notification providing electronic link or Uniform Resource Locator for accessing such notice.

(3) (i) The e-mail shall be addressed to the person entitled to receive such e-mail as per the records of the

company or as provided by the depository:

43

Provided that the company shall provide an advance opportunity at least once in a financial year, to the member to register his e-mail address and changes therein and such request may be made by only those members who have not got their email id recorded or to update a fresh email id and not from the members whose e-mail ids are already registered.

(ii) The subject line in e-mail shall state the name of the company, notice of the type of meeting, place and the date on which the meeting is scheduled.

(iii) If notice is sent in the form of a non-editable attachment to e-mail, such attachment shall be in the Portable Document Format or in a non-editable format together with a 'link or instructions' for recipient for downloading relevant version of the software.

(iv) When notice or notifications of availability of notice are sent by e-mail, the company should ensure that it uses a system which produces confirmation of the total number of recipients e-mailed and a record of each recipient to whom the notice has been sent and copy of such record and any notices of any failed transmissions and subsequent re-sending shall be retained by or on behalf of the company as ‘‘proof of sending’’.

(v) The company’s obligation shall be satisfied when it transmits the e-mail and the company shall not be held responsible for a failure in transmission beyond its control:

(vi) If a member entitled to receive notice fails to provide or update relevant e-mail address to the company or to the depository participant as the case may be, the company shall not be in default for not delivering notice via e-mail.

(vii) The company may send e-mail through in-house facility or its registrar and transfer agent or authorise any third party agency providing bulk e-mail facility.

(viii) The notice made available on the electronic link or Uniform Resource Locator has to be readable, and the recipient should be able to obtain and retain copies and the company shall give the complete Uniform Resource Locator or address of the website and full details of how to access the document or information.

(ix) The notice of the general meeting of the company shall be simultaneously placed on the website of the company if any and on the website as may be notified by the Central Government.

Explanation - For the purpose of this rule, it is hereby declared that the extra ordinary general meeting shall be held at a place within India.

Notes on clause This clause corresponds to sections 171 and 172 of the Companies Act, 1956 and seeks to provide that general meeting may be called by giving not less than clear twenty-one days’ notice to all members, legal representative of any deceased member or the assignee of the insolvent members, the auditors and directors in writing or through electronic mode. A shorter notice may also be given with the consent of ninety-five per cent. Of the members entitled to vote. NOTE:- 1. The words “Twenty one days”, shall be substituted by the words “fourteen days” for section 8 Company, vide

Notification G.S.R 466 (E) dated 5th June 2015.” The Companies Act, 1956 Section – 171. Length of notice for calling meeting

44

(1) A general meeting of a company may be called by giving not less than twenty-one days notice in writing. (2) A general meeting may be called after giving shorter notice than that specified in sub-section (1), if consent

is accorded thereto – (i) in the case of an annual general meeting, by all the members entitled to vote thereat ; and (ii) in the case of any other meeting, by members of the company (a) holding, if the company has a share

capital, not less than 95 per cent of such part of the paid-up share capital of the company as gives a right to vote at the meeting, or (b) having, if the company has no share capital, not less than 95 per cent of the total voting power exercisable at that meeting

Provided that where any members of a company are entitled to vote only on some resolution or resolutions to be moved at a meeting and not on the others, those members shall be taken into account for the purposes of this subsection in respect of the former resolution or resolutions and not in respect of the latter.

Section – 172. Contents and manner of service of notice and persons on whom it is to be served (1) Every notice of a meeting of a company shall specify the place and the day and hour of the meeting, and

shall contain a statement of the business to be transacted thereat. (2) Notice of every meeting of the company shall be given –

(i) To every member of the company, in any manner authorized by sub-sections (1) to (4) of section 53 ; (ii)To the persons entitled to a share in consequence of the death or insolvency of a member, by sending it

through the post in a prepaid letter addressed to them by name, or by the title of representatives of the deceased, or assignees of the insolvent, or by any like description, at the address, if any, in India supplied for the purpose by the persons claiming to be so entitled, or until such an address has been so supplied, by giving the notice in any manner in which it might have been given if the death or insolvency had not occurred ; and

(iii)To the auditor or auditors for the time being of the company, in any manner authorised by section 53 in the case of any member or members of the company :

Provided that where the notice of a meeting is given by advertising the same in a newspaper circulating in the neighborhood of the registered office of the company under sub-section (3) of section 53, the statement of material facts referred to in section 173 need not be annexed to the notice as required by that section but it shall be mentioned in the advertisement that the statement has been forwarded to the members of the company.

(3) The accidental omission to give notice to, or the non-receipt of notice by, any member or other person to

whom it should be given shall not invalidate the proceedings at the meeting. Modification 1. Now notice for the meeting can also be sent through electronic mode. 2. There is clarity in the time period for giving notice for the meeting i.e. not less than clear 21 days notice in

the new act instead of not less than 21 days notice. 3. Now it is clearly mentioned that notice for general meeting should also be given to the directors of the

45

company which was not given in the old act under this section.

4. Now For calling general meeting whether annual or other at shorter notice consent is to be taken from not less than ninety-five per cent. of the members entitled to vote at such meeting instead of consent is required from all members in case of calling of AGM as per in the old act

Comments With the addition of mode of calling notice in the electronic mode this will help company in saving the cost.

46

Section – 102. STATEMENT TO BE ANNEXED TO NOTICE. (1) A statement setting out the following material facts concerning each item of special business to be

transacted at a general meeting, shall be annexed to the notice calling such meeting, namely:— (a) the nature of concern or interest, financial or otherwise, if any, in respect of each items of—

(i) every director and the manager, if any; (ii) every other key managerial personnel; and (iii) relatives of the persons mentioned in sub-clauses (i) and (ii);

(b)Any other information and facts that may enable members to understand the meaning, scope and implications of the items of business and to take decision thereon.

(2) For the purposes of sub-section (1),—

(a) in the case of an annual general meeting, all business to be transacted thereat shall be deemed special, other than—

(i) the consideration of financial statements and the reports of the Board of Directors and auditors; (ii) the declaration of any dividend; (iii) the appointment of directors in place of those retiring; (iv) the appointment of, and the fixing of the remuneration of, the auditors; And

(b) in the case of any other meeting, all business shall be deemed to be special: Provided that where any item of special business to be transacted at a meeting of the company relates to or affects any other company, the extent of shareholding interest in that other company of every promoter, director, manager, if any, and of every other key managerial personnel of the first mentioned company shall, if the extent of such shareholding is not less than two percent of the paid-up share capital of that company, also be set out in the statement.

(3) Where any item of business refers to any document, which is to be considered at the meeting, the time and place where such document can be inspected shall be specified in the statement under sub-section (1).

(4) Where as a result of the non-disclosure or insufficient disclosure in any statement referred to in sub-section

(1), being made by a promoter, director, manager, if any, or other key managerial personnel, any benefit which accrues to such promoter, director, manager or other key managerial personnel or their relatives, either directly or indirectly, the promoter, director, manager or other key managerial personnel, as the case may be, shall hold such benefit in trust for the company, and shall, without prejudice to any other action being taken against him under this Act or under any other law for the time being in force, be liable to compensate the company to the extent of the benefit received by him.

(5) If any default is made in complying with the provisions of this section, every promoter, director, manager

or other key managerial personnel who is in default shall be punishable with fine which may extend to fifty thousand rupees or five times the amount of benefit accruing to the promoter, director, manager or

47

other key managerial personnel or any of his relatives, whichever is more.

Applicability Applicable w.e.f. 12 September 2013 Notes on clause This clause corresponds to section 173 of the Companies Act, 1956 and seeks to provide that a statement setting out all the material facts concerning each item of special business to be transacted at a general meeting, shall be annexed to the notice calling such meeting. This clause further provides for the businesses that shall be deemed to be special. In case of non-disclosure or insufficient disclosure in any statement made by promoter, director, manager or other key managerial personnel which results into any benefit for themselves or their relatives, shall have to be compensated. Penal provision has been provided for any default in compliance The Companies Act, 1956 Section – 173. Explanatory statement to be annexed to notice (1) For the purposes of this section –

(a) in the case of an annual general meeting, all business to be transacted at the meeting shall be deemed special, with the exception of business relating to (i) the consideration of the accounts, balance sheet and the reports of the Board of directors and auditors, (ii) the declaration of a dividend, (iii) the appointment of directors in the place of those retiring, and (iv) the appointment of and the fixing of the remuneration of, the auditors ; and

(b) in the case of any other meeting, all business shall be deemed special. (2) Where any items of business to be transacted at the meeting are deemed to be special as aforesaid, there

shall be annexed to the notice of the meeting a statement setting out all material facts concerning each such item of business, including in particular the nature of the concern or interest, if any, therein, of every director, 1[***] and the manager, if any :

Provided that where any item of special business as aforesaid to be transacted at a meeting of the company relates to, or affects, any other company, the extent of shareholding interest in that other company of every director, 1[***] and the manager, if any, of the first-mentioned company shall also be set out in the statement if the extent of such shareholding interest is not less than twenty per cent of the paid-up share capital of that other company.

(3) Where any item of business consists of the according of approval to any document by the meeting, the time and place where the document can be inspected shall be specified in the statement aforesaid.

Modification 1. In case of items regarding special business, along with the word director and manager the words promoter

and KMP has been inserted. 2. Moreover information of above mentioned persons with shareholding not less than 2% of the paid-up share

capital of that Company also be set out in the statement which was earlier 20%.

48

3. Penalty for not complying with the provisions of this section, or for any non disclosure of statement

extended to 50000 or 5 times the amount of benefit accruing. Comments The scope of this is increased with the inclusion of KMP and promoter along director and manager in setting out the statement having shareholding not less than 2 % of paid-up share capital and also action is taken in case of non disclosure.

49

Section - 103. QUORUM FOR MEETINGS. (1) Unless the articles of the company provide for a larger number,—

(a) In case of a public company,—: (i) five members personally present if the number of members as on the date of meeting is not more

than one thousand; (ii) fifteen members personally present if the number of members as on the date of meeting is more

than one thousand but up to five thousand; (iii) thirty members personally present if the number of members as on the date of the meeting exceeds

five thousand; (b) In the case of a private company, two members personally present, shall be the quorum for a meeting

of the company.

(2) If the quorum is not present within half-an-hour from the time appointed for holding a meeting of the company—

(a) the meeting shall stand adjourned to the same day in the next week at the same time and place, or to such other date and such other time and place as the Board may determine; or

(b) the meeting, if called by requisitionists under section 100, shall stand cancelled: Provided that in case of an adjourned meeting or of a change of day, time or place of meeting under clause (a), the company shall give not less than three days notice to the members either individually or by publishing an advertisement in the newspapers (one in English and one in vernacular language) which is in circulation at the place where the registered office of the company is situated.

Applicability Applicable with effect from 12 September 2013 Notes on clause This clause corresponds to section 174 of the Companies Act, 1956 and seeks to provide that unless the articles of the company provide for a larger number, in case of a public company the quorum shall depend on number of members as on the date of a meeting. In case such number is not more than one thousand, then quorum shall be five members personally present. If such number is more than one thousand but up to five thousand, then quorum shall be fifteen members personally present. If such number exceeds five thousand, then thirty members personally present shall be the quorum. In case of a private company, two members personally present shall be the quorum for a meeting. This clause further provides that if the quorum is not present within half-an-hour, the meeting shall stand adjourned for the next week at the same time and place or such other time and place as decided by the Board. However, the meeting called by requisitionist shall stand cancelled in the absence of quorum. In case of adjournment or of change of day, time and place of meeting, the company shall give not less than three days’ notice to the members. Where quorum is not present in the adjourned meeting also, the members present shall be the quorum.

50

The Companies Act, 1956 Section – 174. Quorum for meeting (1) Unless the articles of the company provide for a larger number, five members personally present in the case

of public company (other than a public company which has become such by virtue of section 43A), and two members personally present in the case of any other company, shall be the quorum for a meeting of the company.

(2) Unless the articles of the company otherwise provide, the provisions of sub-sections (3), (4) and (5) shall

apply with respect to the meetings of a public or private company. (3) If within half an hour from the time appointed for holding a meeting of the company, a quorum is not

present, the meeting, if called upon the requisition of members, shall stand dissolved. (4) In any other case, the meeting shall stand adjourned to the same day in the next week, at the same time and

place, or to such other day and at such other time and place as the Board may determine. (5) If at the adjourned meeting also, a quorum is not present within half an hour from the time appointed for

holding the meeting, the members present shall be a quorum. Modification 1. Different limits has been set out of quorum in case of public company i.e.

(i) Five members personally present if the number of members as on the date of meeting is not more than one thousand;

(ii) Fifteen members personally present if the number of members as on the date of meeting is more than one thousand but up to five thousand;

(iii) Thirty members personally present if the number of members as on the date of the meeting exceeds five thousand;

2. It is clearly mentioned in case of a private company, two members personally present, shall be the quorum

for a meeting of the company. 3. In case of an adjourned meeting or of a change of day, time or place of meeting, the company shall give not

less than three days notice to the members either individually or by publishing an advertisement in the newspapers.

Comments Earlier it was only formality by the company to complete quorum for the meeting but now with setting out the minimum quorum for meeting according to share holders of the company has forward step to safeguard the interest of the investors.

51

Section – 104. CHAIRMAN OF MEETINGS (1) Unless the articles of the company otherwise provide, the members personally present at the meeting shall

elect one of themselves to be the Chairman thereof on a show of hands. (2) If a poll is demanded on the election of the Chairman, it shall be taken forthwith in accordance with the

provisions of this Act and the Chairman elected on a show of hands under sub-section (1) shall continue to be the Chairman of the meeting until some other person is elected as Chairman as a result of the poll, and such other person shall be the Chairman for the rest of the meeting.

Applicability Applicable with effect from 12 September 2013 Notes on clause This clause corresponds to section 175 of the Companies Act, 1956 and seeks to provide that members shall elect one among themselves to be the chairman by show of hands. The clause further provides that if a poll is demanded on the election of the Chairman, the Chairman elected by show of hands shall continue to be the Chairman of the meeting until some other person is elected as Chairman as a result of poll.

The Companies Act, 1956 Section – 175. Chairman of meeting (1) Unless the articles of the company otherwise provide, the members personally present at the meeting shall

elect one of themselves to be the chairman thereof on a show of hands. (2) If a poll is demanded on the election of the chairman, it shall be taken forthwith in accordance with the

provisions of this Act, the chairman elected on a show of hands exercising all the powers of the chairman under the said provisions.

(3) If some other person is elected chairman as a result of the poll, he shall be chairman for the rest of the

meeting. Modification No change Only sub section (2) and (3) combined

52

Section 105. PROXIES (1) Any member of a company entitled to attend and vote at a meeting of the company shall be entitled to

appoint another person as a proxy to attend and vote at the meeting on his behalf:

Provided that a proxy shall not have the right to speak at such meeting and shall not be entitled to vote except on a poll: Provided further that, unless the articles of a company otherwise provide, this subsection shall not apply in the case of a company not having a share capital: Provided also that the Central Government may prescribe a class or classes of companies whose members shall not be entitled to appoint another person as a proxy: Provided also that a person appointed as proxy shall act on behalf of such member or number of members not exceeding fifty and such number of shares as may be prescribed.

(2) In every notice calling a meeting of a company which has a share capital, or the articles of which provide for voting by proxy at the meeting, there shall appear with reasonable prominence a statement that a member entitled to attend and vote is entitled to appoint a proxy, or, where that is allowed, one or more proxies, to attend and vote instead of himself, and that a proxy need not be a member.

(3) If default is made in complying with sub-section (2), every officer of the company who is in default shall

be punishable with fine which may extend to five thousand rupees. (4) Any provision contained in the articles of a company which specifies or requires a longer period than

forty-eight hours before a meeting of the company, for depositing with the company or any other person any instrument appointing a proxy or any other document necessary to show the validity or otherwise relating to the appointment of a proxy in order that the appointment may be effective at such meeting, shall have effect as if a period of forty-eight hours had been specified in or required by such provision for such deposit.

(5) If for the purpose of any meeting of a company, invitations to appoint as proxy a person or one of a number

of persons specified in the invitations are issued at the company’s expense to any member entitled to have a notice of the meeting sent to him and to vote thereat by proxy, every officer of the company who knowingly issues the invitations as aforesaid or willfully authorises or permits their issue shall be punishable with fine which may extend to one lakh rupees:

Provided that an officer shall not be punishable under this sub-section by reason only of the issue to a member at his request in writing of a form of appointment naming the proxy, or of a list of persons willing

53

to act as proxies, if the form or list is available on request in writing to every member entitled to vote at the meeting by proxy.

(6) The instrument appointing a proxy shall— (a) be in writing; and (b) be signed by the appointer or his attorney duly authorised in writing or, if the appointer is a body

corporate, be under its seal or be signed by an officer or an attorney duly authorised by it.

(7) An instrument appointing a proxy, if in the form as may be prescribed, shall not be questioned on the ground that it fails to comply with any special requirements specified for such instrument by the articles of a company.

(8) Every member entitled to vote at a meeting of the company, or on any resolution to be moved thereat, shall

be entitled during the period beginning twenty-four hours before the time fixed for the commencement of the meeting and ending with the conclusion of the meeting, to inspect the proxies lodged, at any time during the business hours of the company, provided not less than three days’ notice in writing of the intention so to inspect is given to the company

Applicability Applicable with effect from 12 September 2013 except the third and fourth proviso of sub-section(1) and sub-section (7) the third and fourth proviso of sub-section(1) and sub-section (7) w.e.f 01 April 2014 Applicable Rule No. 19 Companies (Registration offices and fees) Rules, 2014 Rule – 19. Proxies. (1) A member of a company registered under section 8 shall not be entitled to appoint any other person as his

proxy unless such other person is also a member of such company. (2) A person can act as proxy on behalf of members not exceeding fifty and holding in the aggregate not more

than ten percent of the total share capital of the company carrying voting rights:

Provided that a member holding more than ten percent, of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as proxy for any other person or shareholder.

(3) The appointment of proxy shall be in the Form No. MGT.11. Notes on clause This clause corresponds to section 176 of the Companies Act, 1956 and seeks to provide that a member who is entitled to attend and vote can appoint another person as a proxy to attend and vote at the meeting on his behalf. However, proxy shall not have the right to speak at a meeting and shall not be entitled to vote except on poll. The members of prescribed class of companies shall not be entitled to appoint proxy. A person appointed as proxy shall act on behalf of prescribed number of members not exceeding fifty and prescribed number of

54

shares. The clause also provides for the manner of appointing proxy. Companies Act, 1956 Section – 176. Proxies (1) Any member of a company entitled to attend and vote at a meeting of the company shall be entitled to

appoint another person (whether a member or not) as his proxy to attend and vote instead of himself ; but a proxy so appointed shall not have any right to speak at the meeting : Provided that, unless the articles otherwise provide – (a) This sub-section shall not apply in the case of a company not having a share capital ; (b) A member of a private company shall not be entitled to appoint more than one proxy to attend on the

same occasion ; and (c) A proxy shall not be entitled to vote except on a poll.

(2) In every notice calling a meeting of a company which has a share capital, or the articles of which provide

for voting by proxy at the meeting, there shall appear with reasonable prominence a statement that a member entitled to attend and vote is entitled to appoint a proxy, or, where that is allowed, one or more proxies to attend and vote instead of himself, and that a proxy need not be a member. If default is made in complying with this sub-section as respects any meeting, every officer of the company who is in default shall be punishable with fine which may extend to five thousand rupees.

(3) Any provision contained in the articles of a public company or of a private company which is a subsidiary

of a public company, which specifies or requires a longer period than forty-eight hours before a meeting of the company, for depositing with the company or any other person any instrument appointing a proxy or any other document necessary to show the validity or otherwise relating to the appointment of a proxy in order that the appointment may be effective at such meeting, shall have effect as if a period of forty-eight hours had been specified in or required by such provision for such deposit.

(4) If for the purpose of any meeting of a company, invitations to appoint as proxy a person or one of a number

of persons specified in the invitations are issued at the company's expense to any member entitled to have a notice of the meeting sent to him and to vote thereat by proxy, every officer of the company who knowingly issues the invitations as aforesaid or willfully authorizes or permits their issue shall be punishable with fine which may extend to ten thousand rupees :

Provided that an officer shall not be punishable under this sub-section by reason only of the issue to a member at his request in writing of a form of appointment naming the proxy, or of a list of persons willing to act as proxies, if the form or list is available on request in writing to every member entitled to vote at the meeting by proxy.

(5) The instrument appointing a proxy shall – (a) be in writing ; and (b) be signed by the appointer or his attorney duly authorized in writing or, if the appointer is a body corporate, be under its seal or be signed by an officer or an attorney duly authorized by it.

55

(6) An instrument appointing a proxy, if in any of the forms set out in Schedule IX, shall not be questioned on

the ground that it fails to comply with any special requirements specified for such instrument by the articles.

(7) Every member entitled to vote at a meeting of the company, or on any resolution to be moved thereat, shall

be entitled during the period beginning twenty-four hours before the time fixed for the commencement of the meeting and ending with the conclusion of the meeting, to inspect the proxies lodged, at any time during the business hours of the company, provided not less than three days' notice in writing of the intention so to inspect is given to the company.

Modification 1. Now The Central Government is vested with powers to prescribe a class or classes of companies whose

members shall not be entitled to appoint another person as a proxy. 2. Maximum number is fixed for a person to be appointed as proxy holder i.e. fifty 3. Any invitation to member who is entitled to receive notice of the meeting and to vote be proxy to appoint

person as proxy or one or more number of persons specified in the invitation are issued ar company expense that officer issuing notice shall be punishable with fine of Rs 1 Lakh instead of 10,000 in old act.

56

Section – 106 RESTRICTION ON VOTING RIGHTS (1) Notwithstanding anything contained in this Act, the articles of a company may provide that no member

shall exercise any voting right in respect of any shares registered in his name on which any calls or other sums presently payable by him have not been paid, or in regard to which the company has exercised any right of lien.

(2) A company shall not, except on the grounds specified in sub-section (1), prohibit any member from exercising his voting right on any other ground.

(3) On a poll taken at a meeting of a company, a member entitled to more than one vote, or his proxy, where allowed, or other person entitled to vote for him, as the case may be, need not, if he votes, use all his votes or cast in the same way all the votes he uses.

Applicability Applicable with the effect from 12 September 2013 Notes on clause This clause corresponds to sections 181, 182 and 183 of the Companies Act, 1956 and seeks to provide that no member shall exercise any voting right in respect of any shares registered in his name on which any calls or other sums presently payable by him have not been paid or on which company has exercised any right or lien. No member can be prohibited from exercising his voting right on any other ground.

The Companies Act, 1956 Section – 181. Restriction on exercise of voting right of members who has not paid calls, etc. Notwithstanding anything contained in this Act, the articles of a company may provide that no member shall exercise any voting right in respect of any shares registered in his name on which any calls or other sums presently payable by him have not been paid, or in regard to which the company has and has exercised any right of lien. Section – 182. Restrictions on exercise of voting right in other cases to be void A public company, or a private company which is a subsidiary of a public company, shall not prohibit any member from exercising his voting right on the ground that he has not held his share or other interest in the company for any specified period preceding the date on which the vote is taken, or on any other ground not being a ground set out in section 181. Section – 183. Right of member to use his votes differently On a poll taken at a meeting of a company, a member entitled to more than one vote, or his proxy, or other person entitled to vote for him, as the case may be, need not, if he votes, use all his votes or cast in the same way all the votes he uses.

57

Modification Section related to voting right of a member is combined in one section. Section – 107. VOTING BY SHOW OF HANDS. (1) At any general meeting, a resolution put to the vote of the meeting shall, unless a poll is demanded under

section 109 or the voting is carried out electronically, be decided on a show of hands. (2) A declaration by the Chairman of the meeting of the passing of a resolution or otherwise by show of hands

under sub-section (1) and an entry to that effect in the books containing the minutes of the meeting of the company shall be conclusive evidence of the fact of passing of such resolution or otherwise.

Applicability Applicable w.e.f 12 September 2013 Notes on clause This clause corresponds to sections 177 and 178 of the Companies Act, 1956 and seeks to provide that at general meeting, a resolution put to vote shall, unless a poll is demanded or the voting is carried out electronically, be decided on a show of hands. A declaration by the Chairman and an entry in the minutes book is conclusive evidence that resolution is passed. The Companies Act, 1956 Section – 177. Voting to be by show of hands in first instance At any general meeting, a resolution put to the vote of the meeting shall, unless a poll is demanded under section 179, be decided on a show of hands. Section – 178. Chairman's declaration of result of voting by show of hands to be conclusive A declaration by the chairman in pursuance of section 177 that on a show of hands, a resolution has or has not been carried, or has or has not been carried either unanimously or by a particular majority, and an entry to that effect in the books containing the minutes of the proceedings of the company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes cast in favour of or against such resolution. Modification A new wording is inserted after the words “poll is demanded “ i.e. “or the voting is carried out electronically”

58

Section – 108. VOTING THROUGH ELECTRONIC MEANS. The Central Government may prescribe the class or classes of companies and manner in which a member may exercise his right to vote by the electronic means. Applicability Applicable w.e.f 01-04-2014 Applicable Rule 20 Companies (Registration offices and fees) Rules, 2014 Rule – 20. Voting through electronic means “(1) 1The provisions of this rule shall apply in respect of the general meetings for which notices are issued on or after the

date of commencement of this rule.

(2) Every company other than a company referred to in Chapter XB or Chapter XC of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 having its equity shares listed on a recognized stock exchange or a company having not less than one thousand members, shall provide to its members facility to exercise their right to vote on resolutions proposed to be considered at general meetings by electronic means.

Explanation.- For the purposes of this rule, the expression- (i) “agency” means the National Securities Depository Limited, the Central Depository Services (India) Limited or

any other entity approved by the Ministry of Corporate Affairs subject to the condition that the National Securities Depository Limited, the Central Depository Services (India) Limited or such other entity has obtained a certificate from the Standardization Testing and Quality Certification Directorate, Department of Information Technology, Ministry of Communications and Information Technology, Government of India including with regard to compliance with parameters specified under Explanation (vi);

(ii) “cut-off date” means a date not earlier than seven days before the date of general meeting for determining the eligibility to vote by electronic means or in the general meeting;

(iii) “cyber security” means protecting information, equipment, devices, computer, computer resource, communication device and information stored therein from unauthorised access, use, disclosures, disruption, modification or destruction;

(iv) “electronic voting system” means a secured system based process of display of electronic ballots, recording of votes of the members and the number of votes polled in favour or against, in such a manner that the entire voting exercised by way of electronic means gets registered and counted in an electronic registry in a centralized server

59

with adequate cyber security;

(v) “remote e-voting” means the facility of casting votes by a member using an electronic voting system from a place other than venue of a general meeting;

(vi) “secured system” means computer hardware, software, and procedure that

(a) are reasonably secure from unauthorized access and misuse;

(b) provide a reasonable level of reliability and correct operation;

(c) are reasonably suited to performing the intended functions; and

(d) adhere to generally accepted security procedures;

(vii) “Voting by electronic means” includes “remote e-voting” and voting at the general meeting through an electronic voting system which may be the same as used for remote e-voting.

(3) A member may exercise his right to vote through voting by electronic means on resolutions referred to in sub-rule (2) and the company shall pass such resolutions in accordance with the provisions of this rule.

(4) A company which provides the facility to its members to exercise voting by electronic means shall comply with the following procedure, namely:-

(i) the notice of the meeting shall be sent to all the members, directors and auditors of the company either

(a) by registered post or speed post ; or

(b) through electronic means, namely, registered e-mail ID of the recipient; or

(c) by courier service;

(ii) the notice shall also be placed on the website, if any, of the company and of the agency forthwith after it is sent to the members;

(iii) the notice of the meeting shall clearly state –

(1) That the company is providing facility for voting by electronic means and the business may be transacted through such voting;

(2) That the facility for voting, either through electronic voting system or ballot or polling paper shall also be made available at the meeting and members attending the meeting who have not already cast manner that the entire voting exercised by way of electronic means gets registered and counted in an electronic registry in a centralized server with adequate cyber security;

(v) “remote e-voting” means the facility of casting votes by a member using an electronic voting system from a place

60

other than venue of a general meeting;

(vi) “secured system” means computer hardware, software, and procedure that

(a) are reasonably secure from unauthorized access and misuse;

(b) provide a reasonable level of reliability and correct operation;

(c) are reasonably suited to performing the intended functions; and

(d) adhere to generally accepted security procedures;

(vii) “Voting by electronic means” includes “remote e-voting” and voting at the general meeting through an electronic voting system which may be the same as used for remote e-voting.

(3) A member may exercise his right to vote through voting by electronic means on resolutions referred to in sub-rule (2) and the company shall pass such resolutions in accordance with the provisions of this rule.

(4) A company which provides the facility to its members to exercise voting by electronic means shall comply with the following procedure, namely:-

(i) the notice of the meeting shall be sent to all the members, directors and auditors of the company either

(a) by registered post or speed post ; or

(b) through electronic means, namely, registered e-mail ID of the recipient; or

(c) by courier service;

(ii) the notice shall also be placed on the website, if any, of the company and of the agency forthwith after it is sent to the members;

(iii) the notice of the meeting shall clearly state –

(1) That the company is providing facility for voting by electronic means and the business may be transacted through such voting;

(2) That the facility for voting, either through electronic voting system or ballot or polling paper shall also be made available at the meeting and members attending the meeting who have not already cast their vote by remote e-voting shall be able to exercise their right at the meeting;

(3) that the members who have cast their vote by remote e-voting prior to the meeting may also attend the meeting but shall not be entitled to cast their vote again;

(iv) the notice shall –

61

(1) indicate the process and manner for voting by electronic means ;

(2) indicate the time schedule including the time period during which the votes may be cast by remote e-voting;

(3) provide the details about the login ID;

(4) Specify the process and manner for generating or receiving the password and for casting of vote in a secure manner.

(v) The company shall cause a public notice by way of an advertisement to be published, immediately on completion of dispatch of notices for the meeting under clause (i) of sub-rule (4) but at least twenty-one days before the date of general meeting, at least once in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the company is situated, and having a wide circulation in that district, and at least once in English language in an English newspaper having country-wide circulation, and specifying in the said advertisement, inter alia, the following matters, namely:-

(a) Statement that the business may be transacted through voting by electronic means ;

(b) the date and time of commencement of remote e-voting;

(c) the date and time of end of remote e-voting;

(d) cut-off date;

(e) the manner in which persons who have acquired shares and become members of the company after the dispatch of notice may obtain the login ID and password;

(f) the statement that –

(1) remote e-voting shall not he allowed beyond the said date and time;

(2) the manner in which the company shall provide for voting by members present at the meeting; and

(3) a member may participate in the general meeting even after exercising his right to vote through

remote e-voting but shall not be allowed to vote again in the meeting; and

(4) a person whose name is recorded in the register of members or in the register of beneficial owners maintained by the depositories as on the cut-off date only shall be entitled to avail the facility of remote e-voting as well as voting in the general meeting;

(g) website address of the company, if any, and of the agency where notice of the meeting is displayed; and

(h) name, designation, address, email id and phone number of the person responsible to address the grievances connected with facility for voting by electronic means:

62

Provided that the public notice shall be placed on the website of the company, if any, and of the agency;

(vi) the facility for remote e-voting shall remain open for not less than three days and shall close at 5.00 p.m. on the date preceding the date of the general meeting;

(vii) during the period when facility for remote e-voting is provided, the members of the company, holding shares either in physical form or in dematerialized form, as on the cut-off date, may opt for remote e-voting:

Provided that once the vote on a resolution is cast by the member, he shall not be allowed to change it subsequently or cast the vote again:

Provided further that a member may participate in the general meeting even after exercising his right to vote through remote e-voting but shall not be allowed to vote again;

(viii) at the end of the remote e-voting period, the facility shall forthwith be blocked:

Provided that if a company opts to provide the same electronic voting system as used during remote e-voting during the general meeting, the said facility shall be in operation till all the resolutions are considered and voted upon in the meeting and may be used for voting only by the members attending the meeting and who have not exercised their right to vote through remote e-voting.

(ix) The Board of Directors shall appoint one or more scrutinizer, who may be Chartered Accountant in practice, Cost

Accountant in practice, or Company Secretary in practice or an Advocate, or any other person who is not in employment of the company and is a person of repute who, in the opinion of the Board can scrutinize the voting and remote e-voting process in a fair and transparent manner:

Provided that the scrutinizer so appointed may take assistance of a person who is not in employment of the company and who is well-versed with the electronic voting system;

(x) The scrutinizer shall be willing to be appointed and he available for the purpose of ascertaining the

requisite majority;

(xi) The Chairman shall, at the general meeting, at the end of discussion on the resolutions on which voting is to be held, allow voting, as provided in clauses (a) to (h) of sub-rule (1) of rule 21, as applicable, with the assistance of scrutinizer, by use of ballot or polling paper or by using an electronic voting system for all those members who are present at the general meeting but have not cast their votes by availing the remote e-voting facility.

(xii) The scrutinizer shall, immediately after the conclusion of voting at the general meeting, first count the votes cast at the meeting, thereafter unblock the votes cast through remote e-voting in the presence of at least two witnesses not in the employment of the company and make, not later than three days of conclusion of the meeting, a consolidated scrutinizer’s report of the total votes cast in favor or against, if any, to the Chairman or a person authorized by him in writing who shall countersign the same:

Provided that the Chairman or a person authorized by him in writing shall declare the result of the voting forthwith;

63

Explanation.- It is hereby clarified that the manner in which members have cast their votes, that is, affirming or

negating the resolution, shall remain secret and not available to the Chairman, Scrutinizer or any other person till the votes are cast in the meeting.

(xiii) For the purpose of ensuring that members who have cast their votes through remote e-voting do not vote again at the general meeting, the scrutinizer shall have access, after the closure of period for remote e-voting and before the start of general meeting, to details relating to members, such as their names, folios, number of shares held and such other information that the scrutinizer may require, who have cast votes through remote e-voting but not the manner in which they have cast their votes:

(xiv) the scrutinizer shall maintain a register either manually or electronically to record the assent or dissent received, mentioning the particulars of name, address, folio number or client ID of the members, number of shares held by them, nominal value of such shares and whether the shares have differential voting rights;

(xv) The register and all other papers relating to voting by electronic means shall remain in the safe custody of the scrutinizer until the Chairman considers, approves and signs the minutes and thereafter, the scrutinizer shall hand over the register and other related papers to the company.

(xvi)The results declared along with the report of the scrutinizer shall be placed on the website of the company, if any, and on the website of the agency immediately after the result is declared by the Chairman :

Provided that in case of companies whose equity shares are listed on a recognised stock exchange, the company shall, simultaneously, forward the results to the concerned stock exchange or exchanges where its equity shares are listed and such stock exchange or exchanges shall place the results on its or their website.

(xvii) Subject to receipt of requisite number of votes, the resolution shall be deemed to be passed on the date of the relevant general meeting.

Explanation.- For the purposes of this clause, the requisite number of votes shall be the votes required to pass the resolution as the ‘ordinary resolution’ or the `special resolution’, as the case may be, under section 114 of the Act.

(xviii) a resolution proposed to be considered through voting by electronic means shall not be withdrawn”.

Notes on clause This is a new clause and it provides that a member in the prescribed class of companies may exercise his right to vote by electronic means. NOTE :-

1) Substituted by the Companies (Management and administration) Amendment rules, 2015 vide Notification No. G.S.R. 207(E), dated 19.03.2015.

• prior to substitution:- “(1) Every listed company or a company having not less than one thousand shareholders shall provide to its

members facility to exercise their right to vote at general meetings by electronic means.

64

(2) A member may exercise his right to vote at any general meeting by electronic means and company may pass any

resolution by electronic voting system in accordance with the provisions of this rule. Explanation - For the purposes of this rule.- (i) The expressions ‘‘voting by electronic means’’ or ‘‘electronic voting system’’ means a ‘secured system’ based

process of display of electronic ballots, recording of votes of the members and the number of votes polled in favour or against, such that the entire voting exercised by way of electronic means gets .registered and counted in an electronic registry in a centralized server with adequate ‘cyber security’;

(ii) The expression ‘‘secured system’’ means computer hardware, software, and procedure that –

(a) are reasonably secure from unauthorized access and misuse; (b) provide a reasonable level of reliability and correct operation; (c) are reasonably suited to performing the intended functions; and (d) Adhere to generally accepted security procedures.

(iii) The expression “Cyber security” means protecting information, equipment, devices, computer, computer resource, communication device and information stored therein from unauthorised access, use, disclosures, disruption, modification or destruction.

(3) A company which opts to provide the facility to its members to exercise their votes at any general meeting by

electronic voting system shall follow the following procedure, namely; (i) the notices of the meeting shall be sent to all the members, auditors of the company, or directors either -

(a) by registered post or speed post ; or (b) through electronic means like registered e-mail id; (c) through courier service;

(ii) the notice shall also be placed on the website of the company, if any and of the agency forthwith after it is sent to the members;

(iii) the notice of the meeting shall clearly mention that the business may be transacted through electronic voting system and the company is providing facility for voting by electronic means

(iv) the notice shall clearly indicate the process and manner for voting by electronic means and the time schedule including the time period during which the votes may be cast and shall also provide the login ID and create a facility for generating password and for keeping security and casting of vote in a secure manner

(v) the company shall cause an advertisement to be published, not less than five days before the date of beginning of the voting period, at least once in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the company is situated, and having a wide circulation in that district, and at least once in English language in an English newspaper having a wide circulation in that district, about having sent the notice of the meeting and specifying therein

inter alia, the following matters, namely:- (a) statement that the business may be transacted by electronic voting; (b) the date of completion of sending of notices; (c) the date and time of commencement of voting through electronic means;

(d) the date and time of end of voting through electronic means; (e) the statement that voting shall not be allowed beyond the said date and time; (f) website address of the company and agency, if any, where notice of the meeting is displayed; an (g) contact details of the person responsible to address the grievances connected with the electronic voting;

65

(vi) The e-voting shall remain open for not less than one day and not more than three days:

Provided that in all such cases, such voting period shall be completed three days prior to the date of the general meeting;

(vii) During the e-voting period, shareholders of the company, holding shares either in physical form or in

dematerialized form, as on the record date, may cast their vote electronically: Provided that once the vote on a resolution is cast by the shareholder, he shall not be allowed to change it

subsequently. (viii) At the end of the voting period, the portal where votes are cast shall forthwith be blocked. (ix) the Board of directors shall appoint one scrutinizer, who may be chartered Accountant in practice, Cost

Accountant in practice, or Company Secretary in practice or an advocate, but not in employment of the company and is a person of repute who, in the opinion of the Board can scrutinize the e-voting process in a fair and transparent manner:

Provided that the scrutinizer so appointed may take assistance of a person who is not in employment of the company and who is well-versed with the e-voting system;

(x) the scrutinizer shall be willing to be appointed and be available for the purpose of ascertaining the requisite majority;

(xi) the scrutinizer shall, within a period of not exceeding three working days from the date of conclusion of e-voting period, unblock the votes in the presence of at least two witnesses not in the employment of the company and make a scrutinizer’s report of the votes cast in favour or against, if any, forthwith to the Chairman;

(xii) the scrutinizer shall maintain a register either manually or electronically to record the assent or dissent, received, mentioning the particulars of name, address, folio number or client ID of the shareholders,

number of shares held by them, nominal value of such shares and whether the shares have differential voting rights;

(xiii) The register and all other papers relating to electronic voting shall remain in the safe custody of the scrutinizer until the chairman considers, approves and signs the minutes and thereafter, the scrutinizer shall return the register and other related papers to the company.

(xiv) the results declared along with the scrutinizer’s report shall be placed on the website of the company and on the website of the agency within two days of passing of the resolution at the relevant general meeting of members;

(xv) Subject to receipt of sufficient votes, the resolution shall be deemed to be passed on the date of the relevant general meeting of members."

• Previous Amendments in Rule 20 :- In Notification vide G.S.R. 415(E) The Companies (Management and Administration) Rules, 2014, in rule 20, Dated

23.06.2014 :- (i) In sub-rule (1), the following shall be inserted, namely:- “Provided that the Company may provide the facility

referred to in this sub-rule on or before the 1stday of January 2015.” (ii) In sub-rule (3), for the words “which opts to provide”, the words “which provides” shall be substituted.

2) Circular 20/2014 issued by MCA on 17.06.2014 “Regarding Clarification with regard to voting through

electronic means Reg” To provide clarity and ensure uniformity in the e-voting procedure, Clarification on certain issues raised by the

stakeholders are provided in the Annexure to this circular for guidance of all concerned. These issues with the approval

66

of the competent authority.

Clarifications on issues associated with e-voting procedure

(i) Show of hands not to be allowed in case of e-voting',- In view of clear provisions of section 107, voting by show of hands would not be allowable in cases where rule 20 of Companies (Management and Administration) Rules, 2014 is applicable.

(ii) Participation in the general meeting after voting by e-means:- It is clarified that a person who has voted

through e-voting mechanism in accordance with rule 20 shall not be debarred from participation in the general meeting physically. But he shall not be able to vote in the meeting again, and his earlier vote (cast through e-means) shall be treated as final.

(iii) Applicability of rule 20 for matters specified under rule 22(16): Stakeholders have asked whether matters

specified under rule 22(16) (transactions of certain items only through postal ballot) can be considered in a general meeting where e-voting facilit5r is available. It has been examined and it is stated that in view of clear provisions of section 110(1)(a) read with such rule 22(16) it would be necessary to transact items specified in rule 22(16) only through postal ballot and not at the general meeting.

(iv) Relevance of provisions relating to demand for poll :- In case of companies having share capital, voting

through e-means takes into account 'Proportion principle'[i.e. 'one share - one vote] unlike one person - one vote’ principle under 'show of hands'. This along with provisions of section 107

make it clear that in case of companies which are covered under section 1Og read with rule 20 of Companies (Management and Administration) Rules, the provisions relating to demand for poll would not be relevant.

(v) Permissibility of voting by postal ballot under rule 2O- Stakeholders have sought a clarification that In cases (covered under rule 20) where a shareholder who is not able to participate in the general meeting

personally and who is also not exercising voting through e means whether such a person shall have the option to vote through postal ballot. The matter has been examined and it is felt that keeping in view the provisions of the Act such an option would not be available.

(vi) Manner of voting in case of shareholders present in the meeting:- Stakeholders have sought clarity about

manner of voting for shareholders (of a company covered under rule 2O) who are present in the general meeting. It is hereby clarified that since voting through e-means would be on the basis of proportion of share in the paid-up capital or’ one-share one-vote', the

(vii) Chairperson of the meeting shall regulate the meeting accordingly,

(vii) Applying rule 20 voluntarily:- Stakeholders have referred to words a company which opts to appearing in

rule 20(3) and have raised a query whether rule 20 is applicable to companies not covered in rule 20(1). It is clarified that rule 2O (3) is being amended to align it with rule 20(1). Regarding voluntary application of rule 20, it is clarified that in case a company not mandated under rule 2O{1) opts or decided to give its shareholders the e-voting facility, in such a case, the whole of procedure specified in rule 20 shall be applicable to such a company. This is necessary so that any piece-meal application does not prejudice the interest of shareholders.

67

Section – 109 DEMAND FOR POLL. (1) Before or on the declaration of the result of the voting on any resolution on show of hands, a poll may be

ordered to be taken by the Chairman of the meeting on his own motion, and shall be ordered to be taken by him on a demand made in that behalf,— (a) In the case a company having a share capital, by the members present in person or by proxy, where

allowed, and having not less than one-tenth of the total voting power or holding shares on which an aggregate sum of not less than five lakh rupees or such higher amount as may be prescribed has been paid-up; and

(b) In the case of any other company, by any member or members present in person or by proxy, where allowed, and having not less than one-tenth of the total voting power.

(2) The demand for a poll may be withdrawn at any time by the persons who made the demand. (3) A poll demanded for adjournment of the meeting or appointment of Chairman of the meeting shall be taken

forthwith. (4) A poll demanded on any question other than adjournment of the meeting or appointment of Chairman shall

be taken at such time, not being later than forty-eight hours from the time when the demand was made, as the Chairman of the meeting may direct.

(5) Where a poll is to be taken, the Chairman of the meeting shall appoint such number of persons, as he

deems necessary, to scrutinize the poll process and votes given on the poll and to report thereon to him in the manner as may be prescribed.

(6) Subject to the provisions of this section, the Chairman of the meeting shall have power to regulate the

manner in which the poll shall be taken. (7) The result of the poll shall be deemed to be the decision of the meeting on the resolution on which the poll

was taken. Applicability Applicable w.e.f 01 April

68

Applicable Rule 21 Companies (Registration offices and fees) Rules, 2014 Rule–21. Manner in which the Chairman of meeting shall get the poll process scrutinised and report

thereon. (1) The Chairman of a meeting shall ensure that-:

(a) The Scrutinizers are provided with the Register of Members, specimen signatures of the members, Attendance Register and Register of Proxies.

(b) The Scrutinizers are provided with all the documents received by the Company pursuant to sections 105, 112 and section 113.

(c) The Scrutinizers shall arrange for Polling papers and distribute them to the members and proxies

present at the meeting; in case of joint shareholders, the polling paper shall be given to the first named holder or in his absence to the joint holder attending the meeting as appearing in the chronological order in the folio and the Polling paper shall be in Form No. MGT.12.

(d) The Scrutinizers shall keep a record of the polling papers received in response to poll, by initialing it. (e) The Scrutinizers shall lock and seal an empty polling box in the presence of the members and proxies. (f) The Scrutinizers shall open the Polling box in the presence of two persons as witnesses after the voting

process is over. (g) In case of ambiguity about the validity of a proxy, the Scrutinizers shall decide the validity in

consultation with the Chairman. (h) The Scrutinizers shall ensure that if a member who has appointed a proxy has voted in person, the

proxy’s vote shall be disregarded. (i) The Scrutinizers shall count the votes cast on poll and prepare a report thereon addressed to the

Chairman. (j) Where voting is conducted by electronic means under the provisions of section 108 and rules made

there under, the company shall provide all the necessary support, technical and otherwise, to the Scrutinizers in orderly conduct of the voting and counting the result thereof.

(k) The Scrutinizers’ report shall state total votes cast, valid votes, votes in favour and against the resolution including the details of invalid polling papers and votes comprised therein.

(l) The Scrutinizers shall submit the Report to the Chairman who shall counter-sign the same. (m) The Chairman shall declare the result of Voting on poll. The result may either be announced by him or

a person authorized by him in writing. (2) The scrutinizers appointed for the poll, shall submit a report to the Chairman of the meeting in Form No.

MGT.13 and the report shall be signed by the scrutinizer and, in case there is more than one scrutinizer by all the scrutinizer, and the same shall be submitted by them to the Chairman of the meeting within seven days from the date the poll is taken.

Notes on clause This clause corresponds to sections 179, 180, 184 and 185 of the Companies Act, 1956 and seeks to provide that before or on declaration of result of the voting on any resolution by a show of hands, the Chairman of the meeting on his own or on demand made by specified members order for a poll. This clause further provides that the demand for poll may be withdrawn by the persons who made the demand. The Chairman of the

69

meeting shall appoint scrutinizer for observing the poll process and votes given on poll and to report thereon. The result of the poll shall be deemed to be the decision of the meeting on the resolution. The Chairman shall regulate the manner in which poll shall be taken. The Companies Act , 1956 Section – 179. Demand for poll (1) Before or on the declaration of the result of the voting on any resolution on a show of hands, a poll may be

ordered to be taken by the chairman of the meeting of his own motion, and shall be ordered to be taken by him on a demand made in that behalf by the persons or person specified below, that is to say, -

(a) in the case of a public company having a share capital, by any member or members present in person

or by proxy and holding shares in the company - (i) which confer a power to vote on the resolution not being less than one-tenth of the total voting power in respect of the resolution, or (ii) on which an aggregate sum of not less than fifty thousand rupees has been paid-up,

(b) in the case of a private company having a share capital, by one member having the right to vote on the resolution and present in person or by proxy if not more than seven such members are personally present, and by two such members present in person or by proxy, if more than seven such members are personally present,

(c) in the case of any other company, by any member or members present in person or by proxy and having not less than one-tenth of the total voting power in respect of the resolution.

(2) The demand for a poll may be withdrawn at any time by the person or persons who made the demand. Section – 180 Time of taking poll (1) A poll demanded on a question of adjournment shall be taken forthwith. (2) A poll demanded on any other question (not being a question relating to the election of a chairman which is

provided for in section 175) shall be taken at such time not being later than forty-eight hours from the time when the demand was made, as the chairman may direct.

Section – 181 Scrutineers at poll (1) Where a poll is to be taken, the chairman of the meeting shall appoint two scrutinizers to scrutinize the

votes given on the poll and to report thereon to him. (2) The chairman shall have power, at any time before the result of the poll is declared, to remove scrutinizers

from office and to fill vacancies in the office of scrutinizer arising from such removal or from any other cause.

(3) Of the two scrutinizers appointed under this section, one shall always be a member (not being an officer or employee of the company) present at the meeting, provided such a member is available and willing to be appointed.

Section – 182 Manner of taking poll and result thereof (1) Subject to the provisions of this Act, the chairman of the meeting shall have power to regulate the manner

in which a poll shall be taken

70

(2) The result of the poll shall be deemed to be the decision of the meeting on the resolution on which the poll

was taken. Modification 1. The aggregate limit for demanding poll by member of company having share capital is increased to Rs 5

lakh instead of Rs 50000 thousand. 2. The Chairman of the meeting appoint such number of persons, as he deems necessary to scrutinise the poll

process and votes instead of two as per old Act. 3. The power of chairman to remove a scrutinizer from office and to fill vacancies in the office of scrutineer as

per old act is removed. 4. The limit of member as described in old act for private company for demanding poll is now removed i.e. by

1 member if 7 members personally present and by 2 members if more than 7 members are personally present. Now any member or members present in person or by proxy can demand for poll.

71

Section – 110. POSTAL BALLOT. (1) Notwithstanding anything contained in this Act, a company—

(a) shall, in respect of such items of business as the Central Government may, by notification, declare to be transacted only by means of postal ballot; and

(b) may, in respect of any item of business, other than ordinary business and any business in respect of which directors or auditors have a right to be heard at any meeting, transact by means of postal ballot, in such manner as may be prescribed, instead of transacting such business at a general Meeting.

(2) If a resolution is assented to by the requisite majority of the shareholders by means of postal ballot, it shall

be deemed to have been duly passed at a general meeting convened in that behalf.

Applicability Applicable w.e.f 01 April 2014 Applicable Rule No. 22 of Companies (Registration offices and fees) Rules, 2014 Rule – 22 Procedure to be followed for conducting business through postal ballot. (1) Where a company is required or decides to pass any resolution by way of postal ballot, it shall send a notice

to all the shareholders, along with a draft resolution explaining the reasons therefore and requesting them to send their assent or dissent in writing on a postal ballot because postal ballot means voting by post or through electronic means within a period of thirty days from the date of dispatch of the notice.

(2) The notice shall be sent either (a) by Registered Post or speed post, or (b) through electronic means like

registered e-mail id or (c) through courier service for facilitating the communication of the assent or dissent of the shareholder to the resolution within the said period of thirty days.

(3) An advertisement shall be published at least once in a vernacular newspaper in the principal vernacular

language of the district in which the registered office of the company is situated, and having a wide circulation in that district, and at least once in English language in an English newspaper having a wide circulation in that district, about having dispatched the ballot papers and specifying therein, inter alia, the following matters, namely:-

72

(a) a statement to the effect that the business is to be transacted by postal ballot which includes voting by

electronic means; (b) the date of completion of dispatch of notices; (c) the date of commencement of voting; (d) the date of end of voting; (e) the statement that any postal ballot received from the member beyond the said date will not be valid

and voting whether by post or by electronic means shall not be allowed beyond the said date; (f) a statement to the effect that members, who have not received postal ballot forms may apply to the

company and obtain a duplicate thereof; and (g) Contact details of the person responsible to address the grievances connected with the voting by

postal ballot including voting by electronic means. (4) The notice of the postal ballot shall also be placed on the website of the company forthwith after the

notice is sent to the members and such notice shall remain on such website till the last date for receipt of the postal ballots from the members.

(5) The Board of directors shall appoint one scrutinizer, who is not in employment of the company and who,

in the opinion of the Board can conduct the postal ballot voting process in a fair and transparent manner. (6) The scrutinizer shall be willing to be appointed and be available for the purpose of ascertaining the

requisite majority. (7) If a resolution is assented to by the requisite majority of the shareholders by means of postal ballot

including voting by electronic means, it shall be deemed to have been duly passed at a general meeting convened in that behalf

(8) Postal ballot received back from the shareholders shall be kept in the safe custody of the scrutinizer and

after the receipt of assent or dissent of the shareholder in writing on a postal ballot, no person shall deface or destroy the ballot paper or declare the identity of the shareholder.

(9) The scrutinizer shall submit his report as soon as possible after the last date of receipt of postal ballots but

not later than seven days thereof; (10) The scrutinizer shall maintain a register either manually or electronically to record their assent or dissent

received, mentioning the particulars of name, address, folio number or client ID of the shareholder, number of shares held by them, nominal value of such shares, whether the shares have differential voting rights, if any, details of postal ballots which are received in defaced or mutilated form and postal ballot forms which are invalid.

(11) The postal ballot and all other papers relating to postal ballot including voting by electronic means, shall

be under the safe custody of the scrutinizer till the chairman considers, approves and signs the minutes and thereafter, the scrutinizer shall return the ballot papers and other related papers or register to the company who shall preserve such ballot papers and other related papers or register safely.

73

(12) The assent or dissent received after thirty days from the date of issue of notice shall be treated as if reply

from the member has not been received. (13) The results shall be declared by placing it, along with the scrutinizer’s report, on the website of the

company. (14) The resolution shall be deemed to be passed on the date of at a meeting convened in that behalf. (15) The provisions of rule 20 regarding voting by electronic means shall apply, as far as applicable, mutatis

mutandis to this rule in respect of the voting by electronic means. (16) pursuant to clause (a) of sub-section (1) of section 110, the following items of business shall be transacted

only by means of voting through a postal ballot-

(a) alteration of the objects clause of the memorandum and in the case of the company in existence immediately before the commencement of the Act, alteration of the main objects of the memorandum;

(b) alteration of articles of association in relation to insertion or removal of provisions which, under sub-section (68) of section 2, are required to be included in the articles of a company in order to constitute it a private company;

(c) change in place of registered office outside the local limits of any city, town or village as specified in sub-section (5) of section 12;

(d) change in objects for which a company has raised money from public through prospectus and still has any unutilized amount out of the money so raised under sub-section (8) of section 13;

(e) issue of shares with differential rights as to voting or dividend or otherwise under sub-clause (ii) of clause (a) of section 43;

(f) variation in the rights attached to a class of shares or debentures or other securities as specified under section 48;

(g) buy-back of shares by a company under sub-section (1) of section 68; (h) election of a director under section 151 of the Act; (i) sale of the whole or substantially the whole of an undertaking of a company as specified under

sub-clause (a) of sub-section (1) of section 180;

(j) giving loans or extending guarantee or providing security in excess of the limit specified under sub-section (3) of section 186:

Provided that One Person Company and other companies having members up to two hundred are not required to transact any business through postal ballot.

Notes on clause This clause corresponds to section 192A of the Companies Act, 1956 and seeks to provide that the Central Government may declare items of business that can be transacted only by postal ballot and also in respect of any item of business other than ordinary business and any business in respect of which directors or auditors have a right to be heard at any meeting may also be transacted through postal ballot.

74

The Companies Act, 1956 Section - 192A. Passing of resolutions by postal ballot (1) Notwithstanding anything contained in the foregoing provisions of this Act, a listed public company may,

and in the case of resolutions relating to such business as the Central Government may, by notification, declare to be conducted only by postal ballot, shall, get any resolution passed by means of a postal ballot, instead of transacting the business in general meeting of the company.

(2) Where a company decides to pass any resolution by resorting to postal ballot, it shall send a notice to all the

shareholders, along with a draft resolution explaining the reasons therefore, and requesting them to send their assent or dissent in writing on a postal ballot within a period of thirty days from the date of posting of the letter.

(3) The notice shall be sent by registered post acknowledgement due, or by any other method as may be

prescribed by the Central Government in this behalf, and shall include with the notice, a postage pre-paid envelope for facilitating the communication of the assent or dissent of the shareholder to the resolution within the said period.

(4) If a resolution is assented to by a requisite majority of the shareholders by means of postal ballot, it shall be

deemed to have been duly passed at a general meeting convened in that behalf. (5) If a shareholder sends under sub-section (2) his assent or dissent in writing on a postal ballot and thereafter

any person fraudulently defaces or destroys the ballot paper or declaration of identify of the shareholder, such person shall be punishable with imprisonment for a term which may extend to six months or with fine or with both.

(6) If a default is made in complying with sub-sections (1) to (4), the company and every officer of the

company, who is in default, shall be punishable with fine which may extend to fifty thousand rupees in respect of each such default.

Explanation - For the purposes of this section, "postal ballot" includes voting by electronic mode.

Modification 1. Provisions of postal ballot is applicable to both listed or unlisted company 2. Penalty under this section removed 3. New Added: - A company in respect of any item of business transacts by means of postal ballot, other than

ordinary business and any business in respect of which directors or auditors have a right to be heard at any meeting.

4. Mode of sending notice is described in the rules

75

Section – 111. CIRCULATION OF MEMBERS’ RESOLUTION. (1) A company shall, on requisition in writing of such number of members, as required in section 100,

(a) give notice to members of any resolution which may properly be moved and is intended to be moved at a meeting; and

(b) Circulate to members any statement with respect to the matters referred to in proposed resolution or business to be dealt with at that meeting.

(2) A company shall not be bound under this section to give notice of any resolution or to circulate any

statement unless— (a) a copy of the requisition signed by the requisitionists (or two or more copies which, between them,

contain the signatures of all the requisitionists) is deposited at the registered office of the company,— (i) in the case of a requisition requiring notice of a resolution, not less than six weeks before the

meeting; (ii) in the case of any other requisition, not less than two weeks before the meeting; and

(b) there is deposited or tendered with the requisition, a sum reasonably sufficient to meet the company’s expenses in giving effect thereto:

Provided that if, after a copy of a requisition requiring notice of a resolution has been deposited at the registered office of the company, an annual general meeting is called on a date within six weeks after the copy has been deposited, the copy, although not deposited within the time required by this sub-section, shall be deemed to have been properly deposited for the purposes thereof.

(3) The company shall not be bound to circulate any statement as required by clause (b) of sub-section (1), if

on the application either of the company or of any other person who claims to be aggrieved, the Central Government, by order, declares that the rights conferred by this section are being abused to secure needless publicity for defamatory matter.

(4) An order made under sub-section (3) may also direct that the cost incurred by the company by virtue of this

section shall be paid to the company by the requisitionists, notwithstanding that they are not parties to the application.

(5) If any default is made in complying with the provisions of this section, the company and every officer of

76

the company who is in default shall be liable to a penalty of twenty-five thousand rupees.

Applicability Applicable w.e.f 12 September 2013 Notes on clause This clause corresponds to section 188 of the Companies Act, 1956 and seeks to provide that a company shall, on requisition in writing of certain number of members, give notice or circulate statement to members on proposed resolution intended to be moved in the meeting. The statement need not be circulated if the Central Government declares that the right conferred is being abused to secure needless publicity for defamatory matters. If default is made the company and every officer of the company shall be punishable with fine. The Companies Act, 1956 Section – 188. Circulation of members' resolutions (1) Subject to the provisions of this section, a company shall, on the requisition in writing of such number of

members as is hereinafter specified and (unless the company otherwise resolves) at the expense of the requisitionists, -

(a) give to members of the company entitled to receive notice of the next annual general meeting, notice of any resolution which may properly be moved and is intended to be moved at that meeting ;

(b) circulate to members entitled to have notice of any general meeting sent to them, any statement of not more than one thousand words with respect to the matter referred to in any proposed resolution, or any business to be dealt with at that meeting.

(2) The number of members necessary for a requisition under sub- section (1) shall be –

(a) such number of members as represent not less than one-twentieth of the total voting power of all the members having at the date of the requisition a right to vote on the resolution or business to which the requisition relates ; or

(b) not less than one hundred members having the right aforesaid and holding shares in the company on which there has been paid-up an aggregate sum of not less than one lakh of rupees in all.

(3) Notice of any such resolution shall be given, and any such statement shall be circulated, to members of the

company entitled to have notice of the meeting sent to them, by serving a copy of the resolution or statement on each member in any manner permitted for service of notice of the meeting ; and notice of any such resolution shall be given to any other member of the company by giving notice of the general effect of the resolution in any manner permitted for giving him notice of meetings of the company :

Provided that the copy shall be served, or notice of the effect of the resolution shall be given, as the case may be, in the same manner and, so far as practicable, at the same time as notice of the meeting, and where it is not practicable for it to be served or given at that time, it shall be served or given as soon as practicable thereafter.

(4) A company shall not be bound under this section to give notice of any resolution or to circulate any

77

statement unless –

(a) a copy of the requisition signed by the requisitionists (or two or more copies which between them contain the signatures of all the requisitionists) is deposited at the registered office of the company-

(i) in the case of a requisition requiring notice of a resolution, not less than six weeks before the meeting ;

(ii) in the case of any other requisition, not less than two weeks before the meeting ; and (b) there is deposited or tendered with the requisition a sum reasonably sufficient to meet the company's

expenses in giving effect thereto

Provided that if, after a copy of a requisition requiring notice of a resolution has been deposited at the registered office of the company, an annual general meeting is called for a date six weeks or less after the copy has been deposited, the copy, although not deposited within the time required by this sub-section, shall be deemed to have been properly deposited for the purposes thereof.

(5) The company shall also not be bound under this section to circulate any statement if, on the application

either of the company or of any other person who claims to be aggrieved, the 1[Central Government] is satisfied that the rights conferred by this section are being abused to secure needless publicity for defamatory matter ; and the 1[Central Government] may order the company's costs on an application under this section to be paid in whole or in part by the requisitionists, notwithstanding that they are not parties to the application.

(6) A banking company shall not be bound to circulate any statement under this section, if, in the opinion of its

Board of directors, the circulation will injure the interests of the company. (7) Notwithstanding anything in the company's articles, the business which may be dealt with at an annual

general meeting shall include any resolution of which notice is given in accordance with this section, and for the purposes of this sub-section, notice shall be deemed to have been so given, notwithstanding the accidental omission, in giving it, of one or more members.

(8) If default is made in complying with the provisions of this section, every officer of the company who is in

default shall be punishable with fine which may extend to fifty thousand rupees.

Modification 1. the number of such members making requisition in writing to company is specified in section 100 2. Penalty in case of default decreased from Rs 50000 to Rs 25000

78

Section - 112. REPRESENTATION OF PRESIDENT AND GOVERNORS IN MEETINGS. (1) The President of India or the Governor of a State, if he is a member of a company, may appoint such person

as he thinks fit to act as his representative at any meeting of the company or at any meeting of any class of members of the company.

(2)A person appointed to act under sub-section (1) shall, for the purposes of this Act, be deemed to be a

member of such a company and shall be entitled to exercise the same rights and powers, including the right to vote by proxy and postal ballot, as the President or, as the case may be, the Governor could exercise as a member of the company.

Applicability Applicable w.e.f 12 September 2013 Notes on clause This clause corresponds to section 187A of the Companies Act, 1956 and seeks to provide that President of India or the Governor of a State, if he is a member of a company, may appoint such person as he thinks fit, to act as his representative at any meeting and to vote by proxy and postal ballot as member of the company.

The Companies Act, 1956 Section - 187A Representation of the president and governors in meetings of companies of which they

are members (1) The President of India or the Governor of a State, if he is a member of a company, may appoint such person as he thinks fit to act as his representative at any meeting of the company or at any meeting of any class of members of the company. (2) A person appointed to act as aforesaid shall, for the purposes of this Act, be deemed to be a member of such a company and shall be entitled to exercise the same rights and powers (including the right to vote by proxy) as the President or, as the case may be, the Governor could exercise as a member of the company. Section - 187A Exercise of voting rights in respect of shares held in trust

79

(1) Save as otherwise provided in section 153B but notwithstanding anything contained in any other provisions

of this Act or any other law or any contract, memorandum or articles, where any shares in a company are held in trust by a person (hereinafter referred to as trustee), the rights and powers (including the right to vote by proxy) exercisable at any meeting of the company or at any meeting of any class of members of the company by the trustee as a member of the company shall –:

(a) cease to be exercisable by the trustee as such member, and (b) Become exercisable by the public trustee.

(2) The public trustee may, instead of himself attending the meeting, and exercising the rights and powers, as

aforesaid, appoint as his proxy an officer of Government or the trustee himself to attend such meeting and to exercise such rights and powers in accordance with the directions of the public trustee :

Provided that where the trustee is appointed by the public trustee as his proxy, the trustee shall be entitled, notwithstanding anything contained in any other provisions of this Act, to exercise such rights and powers in the same manner as he would have been but for the provisions of this section.

(3) The public trustee may abstain from exercising the rights and powers conferred on him by this section if in his opinion the objects of the trust or the interests of the beneficiaries of the trust are not likely to be adversely affected by such abstention. (4) If for any reason the trustee considers that the public trustee should not abstain from exercising the rights and powers conferred on him by this section and the exercise of such rights and powers is necessary in order to safeguard the objects of the trust or the interests of the beneficiaries of the trust, he may by writing communicate his views in this behalf to the public trustee but the public trustee may in his discretion either accept such views or reject the same. (5) No suit, prosecution or other legal proceeding shall lie against the public trustee at the instance of the trustee or any person on his behalf or any other person on the ground that the public trustee has abstained from exercising the rights and powers conferred on him by this section. (6) In order to enable the public trustee to exercise the rights and powers aforesaid, the public trustee shall also be entitled to receive and inspect all books and papers under this Act, which a member is entitled to receive and inspect. (7) The provisions of this section shall not apply on and after the commencement of the Companies (Amendment) Act, 2000 Modification Now Representative appointed by chairman to act on his behalf now also is entitled to exercise the same rights and powers related to postal ballot along with the right to vote by proxy same as the President do as already given in old act.

80

Section – 113. REPRESENTATION OF CORPORATIONS AT MEETING OF COMPANIES AND

OF CREDITORS. (1) A body corporate, whether a company within the meaning of this Act or not, may, —

(a) if it is a member of a company within the meaning of this Act, by resolution of its Board of Directors or other governing body, authorise such person as it thinks fit to act as its representative at any meeting of the company, or at any meeting of any class of members of the company;

(b) if it is a creditor, including a holder of debentures, of a company within the meaning of this Act, by resolution of its directors or other governing body, authorise such person as it thinks fit to act as its representative at any meeting of any creditors of the company held in pursuance of this Act or of any rules made thereunder, or in pursuance of the provisions contained in any debenture or trust deed, as the case may be.

(2) A person authorised by resolution under sub-section (1) shall be entitled to exercise the same rights and powers, including the right to vote by proxy and by postal ballot, on behalf of the body corporate which he represents as that body could exercise if it were an individual member, creditor or holder of debentures of the company.

Applicability Applicable w.e.f 12 September 2013 [except clause (b) of sub-section (1) ][except clause (b) of sub-section (1) ] w.e.f 01 April 2014 Notes on clause This clause corresponds to section 187 of the Companies Act, 1956 and seeks to provide that where a body corporate is a member or a creditor including a holder of debentures of the company and it authorises any person as its representative at any meeting of the company or any class of members of the company or at any meeting of creditors of the company, such representative shall be entitled to exercise the same rights and powers including right to vote by proxy and by postal ballot on behalf of the body corporate which he represents.

The Companies Act, 1956 Section – 187. Representation of corporations at meetings of companies and of creditors (1) A body corporate (whether a company within the meaning of this Act or not) may –

81

(a) If it is a member of a company within the meaning of this Act, by resolution of its Board of directors or

other governing body, authorize such person as it thinks fit to act as its representative at any meeting of the company, or at any meeting of any class of members of the company ;

(b) If it is a creditor (including a holder of debentures) of a company within the meaning of this Act, by resolution of its directors or other governing body, authorizes such person as it thinks fit to act as its representative at any meeting of any creditors of the company held in pursuance of this Act or of any rules made there under, or in pursuance of the provisions contained in any debenture or trust deed, as the case may be.

(2) A person authorised by resolution as aforesaid shall be entitled to exercise the same rights and powers

(including the right to vote by proxy) on behalf of the body corporate which he represents as that body could exercise if it were an individual member, creditor or holder of debentures of the company.

Modification A person authorised by resolution is now also entitled to exercise the same rights and powers related to right to vote by postal ballot, on behalf of the body corporate which he represents along with including the right to vote by proxy.

82

Section – 114. ORDINARY AND SPECIAL RESOLUTIONS (1) A resolution shall be an ordinary resolution if the notice required under this Act has been duly given and it

is required to be passed by the votes cast, whether on a show of hands, or electronically or on a poll, as the case may be, in favour of the resolution, including the casting vote, if any, of the Chairman, by members who, being entitled so to do, vote in person, or where proxies are allowed, by proxy or by postal ballot, exceed the votes, if any, cast against the resolution by members, so entitled and voting.

(2) A resolution shall be a special resolution when—

(a) the intention to propose the resolution as a special resolution has been duly specified in the notice calling the general meeting or other intimation given to the members of the resolution;

(b) the notice required under this Act has been duly given; and (c) the votes cast in favour of the resolution, whether on a show of hands, or electronically or on a poll, as

the case may be, by members who, being entitled so to do, vote in person or by proxy or by postal ballot, are required to be not less than three times the number of the votes, if any, cast against the resolution by members so entitled and voting.

Applicability Applicable w.e.f 12 September 2013 Notes on clause This clause corresponds to section 189 of the Companies Act, 1956 and seeks to provide that a resolution shall be an ordinary resolution if the votes cast in favour of the resolution exceeds the votes, if any, cast against the resolution by the members. A resolution shall be special when it is duly specified in the notice, calling the general meeting and votes cast in favour is three times the votes cast against the resolution. The Companies Act, 1956 Section – 189. Ordinary and special resolution (1) A resolution shall be an ordinary resolution when at a general meeting of which the notice required under

this Act has been duly given, the votes cast (whether on a show of hands, or on a poll, as the case may be,) in favour of the resolution (including the casting vote, if any, of the chairman) by members who, being entitled so to do, vote in person, or where proxies are allowed, by proxy, exceed the votes, if any,

83

cast against the resolution by members so entitled and voting.

(2) A resolution shall be a special resolution when –

(a) the intention to propose the resolution as a special resolution has been duly specified in the notice calling the general meeting or other intimation given to the members of the resolution ;

(b) the notice required under this Act has been duly given of the general meeting ; and (c) the votes cast in favour of the resolution (whether on a show of hands, or on a poll, as the case may

be), by members who, being entitled so to do, vote in person, or where proxies are allowed, by proxy, are not less than three times the number of the votes, if any, cast against the resolution by members so entitled and voting.

Modification 1. Electronic mode included for voting

84

Section – 115 SOLUTIONS REQUIRING SPECIAL NOTICE Where, by any provision contained in this Act or in the articles of a company, special notice is required of any resolution, notice of the intention to move such resolution shall be given to the company by such number of members holding not less than one per cent. of total voting power or holding shares on which such aggregate sum not exceeding five lakh rupees, as may be prescribed, has been paid-up and the company shall give its members notice of the resolution in such manner as may be prescribed. Applicability Applicable w.e.f 01 April 2014 Applicable Rule 23 of Companies (Management and Administration) Rules, 2014. Rule – 23. Special Notice. (1) A special notice required to be given to the company shall be signed, either individually or collectively by

such number of members holding not less than one percent of total voting power or holding shares on

which an aggregate sum of 1 “not less than five Lakh Rupees” has been paid up on the date of notice

(2) The notice referred to in sub-rule (1) shall be sent by members to the company not earlier than three

months but at least fourteen days before the date of the meeting at which the resolution is to be moved, exclusive of the day on which the notice is given and the day of the meeting.

(3) The company shall immediately after receipt of the notice, give its members notice of the resolution at least

seven days before the meeting , exclusive of the day of dispatch of notice and day of the meeting , in the same manner as it gives notice of any general meetings.

(4) Where it is not practicable to give the notice in the same manner as it gives notice of any general meetings,

the notice shall be published in English language in English newspaper and in vernacular language in a vernacular newspaper, both having wide circulation in the State where the registered office of the Company is situated and such notice shall also be posted on the website, if any, of the Company.

(5) The notice shall be published at least seven days before the meeting, exclusive of the day of publication of

the notice and day of the meeting.

85

Notes on clause

This clause corresponds to section 190 of the Companies Act, 1956 and seeks to provide that where a special notice is required of any resolution, notice of the intention to move such resolution is to be given by such

number of members holding not less than one per cent. of total voting power or holding shares on which an Aggregate sum of not less than one lakh rupees has been paid-up in such manner as may be prescribed. Notes : -

1) As per Notification vide G.S.R. (E) dated 28.08.2015 in The Companies ( Management and Administration) Amendment Rules, 2015 in rule 23, in sub-rule(l) for the words 'hot more than five lakh rupees", the words 'not less than five lakh rupees' shall be substituted.

Previous Amendments in Rule 23 :- As per Notification vide G.S.R. 537 (E) dated 24.07.2014 in The Companies ( Management and Administration) Rules, 2015 in rule 23, in sub-rule(l) for the words 'hot less than five lakh rupees", the words 'not more than five lakh rupees' shall be substituted.

The Companies Act, 1956 Section - 190. Resolutions requiring special notice (1) Where, by any provision contained in this Act or in the articles, special notice is required of any resolution,

notice of the intention to move the resolution shall be given to the company not less than fourteen days before the meeting at which it is to be moved, exclusive of the day on which the notice is served or deemed to be served and the day of the meeting.

(2) The company shall, immediately after the notice of the intention to move any such resolution has been

received by it, give its members notice of the resolution in the same manner as it gives notice of the meeting, or if that is not practicable, shall give them notice thereof, either by advertisement in a newspaper having an appropriate circulation or in any other mode allowed by the articles, not less than seven days before the meeting.

Modification 1. Now the resolution which require the intention to move with special notice. Notice of such intention shall be

given to the company by such number of members holding not less than 1%. of total voting power or holding shares on which such aggregate sum not exceeding Rs 5 lakh earlier no provision

2. (new added) The notice sent by members to the company should not earlier than three months but should be

least 14 days before the date of the meeting already given earlier.

86

Section – 116 RESOLUTIONS PASSED AT ADJOURNED MEETING. Where a resolution is passed at an adjourned meeting of—

(a) a company; or (b) the holders of any class of shares in a company; or (c) the Board of Directors of a company, the resolution shall, for all purposes, be treated as having been

passed on the date on which it was in fact passed, and shall not be deemed to have been passed on any earlier date

Applicability Applicable w.e.f 12 September 2013 Notes on clause This clause corresponds to section 191 of the Companies Act, 1956 and seeks to provide that where a resolution is passed at an adjourned meeting, the resolution shall be treated as passed on the day it was actually passed and not on any earlier date.

The Companies Act, 1956 Section - 191. Resolutions passed at adjourned meetings Where a resolution is passed at an adjourned meeting of –

(a) a company ; (b) the holders of any class of shares in a company ; or (c) the Board of directors of a company ; the resolution shall, for all purposes, be treated as having been

passed on the date on which it was in fact passed, and shall not be deemed to have been passed on any earlier date.

Modification No change

87

Section - 117. RESOLUTIONS AND AGREEMENTS TO BE FILED. (1) A copy of every resolution or any agreement, in respect of matters specified in sub-section (3) together with

the explanatory statement under section 102, if any, annexed to the notice calling the meeting in which the resolution is proposed, shall be filed with the Registrar within thirty days of the passing or making thereof in such manner and with such fees as may be prescribed within the time specified under section 403:

Provided that the copy of every resolution which has the effect of altering the articles and the copy of every agreement referred to in sub-section (3) shall be embodied in or annexed to every copy of the articles issued after passing of the resolution or making of the agreement.

(2) If a company fails to file the resolution or the agreement under sub-section (1) before the expiry of the

period specified under section 403 with additional fee, the company shall be punishable with fine which shall not be less than five lakh rupees but which may extend to twenty-five lakh rupees and every officer of the company who is in default, including liquidator of the company, if any, shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.

(3) The provisions of this section shall apply to—

(a) Special resolutions; (b) Resolutions which have been agreed to by all the members of a company, but which, if not so agreed

to, would not have been effective for their purpose unless they had been passed as special resolutions; (c) Any resolution of the Board of Directors of a company or agreement executed by a company, relating

to the appointment, re-appointment or renewal of the appointment, or variation of the terms of appointment, of a managing director;

(d) Resolutions or agreements which have been agreed to by any class of members but which, if not so agreed to, would not have been effective for their purpose unless they had been passed by a specified majority or otherwise in some particular manner; and all resolutions or agreements which effectively bind such class of members though not agreed to by all those members;

(e) Resolutions passed by a company according consent to the exercise by its Board of Directors of any of the powers under clause (a) and clause (c) of sub-section (1) of section 180;

(f) Resolutions requiring a company to be wound up voluntarily passed in pursuance of section 304; (g) Resolutions passed in pursuance of sub-section (3) of section 179; and

88

(h) Any other resolution or agreement as may be prescribed and placed in the public domain.

Clarification of Circular : Penal provisions for false declaration as contained in section 448 read with section 447, MGT-14 Form will use Straight Through Process Mode Except in the cases change of Name, change of object, resolution for further issue of capital and conversion of companies.

The Circular reproduced below: Circular (28/2014) passed by MCA (Subject - Clarification on form MGT-14 through STP mode.)

In order to simplify procedures and with a view to ensure timely disposal of E- Forms in the office of Registrars of Companies and keeping in view the penal provisions for false declaration as contained in section 448 read with section 447, the following E-Forms with the conditions mentioned along with will be processed and taken on record using the Straight Through Process mode.

Sr.No. E-Form Conditions

1 MGT - 14 All cases except for change of Name, change of object, resolution for further issue of capital and conversion of companies will be STP Mode.

Amendment in the Companies Bill 2014 passed by Lok Sabha on 17th December 2014

The Bill, namely, the Companies (Amendment) Bill 2014, inter alia, contains the amendments to the Companies Act, 2013 as under :- (iv) to amend clause (g) of sub-section (3) of section 117 to prohibit public inspection of Board resolutions filed in the Registry. Applicability Applicable w.e.f 01 April 2014 Applicable Rule No. 24 of Companies (Management and Administration) Rules, 2014. Rule- 24. Resolutions and agreements to be filed. A copy of every resolution or any agreement required to be filed, together with the explanatory statement under section 102, if any, shall be filed with the Registrar in Form No. MGT.14 along with the fee. Notes on clause This clause corresponds to section 192 of the Companies Act, 1956 and seeks to provide that a copy of every resolution and an agreement in respect of matters specified therein together with a explanatory statement shall be filed with the Registrar within thirty days of its passing. The Registrar shall register the same and in case of any default, a company and every officer who is in default including the liquidator shall be liable for punishment.

89

The Companies Act, 1956 Section - 192. Registration of certain resolutions and agreements (1) A copy of every resolution (together with a copy of the statement of material facts annexed under section

173 to the notice of the meeting in which such resolution has been passed) or agreement to which this section applies shall, within thirty days after the passing or making thereof, be printed or typewritten and duly certified under the signature of an officer of the company and filed with the Registrar who shall record the same.

(2) Where articles have been registered, a copy of every resolution referred to in sub-section (1) which has the

effect of altering the articles and a copy of every agreement referred to in that sub-section for the time being in force shall be embodied in or annexed to every copy of the articles issued after the passing of the resolution or the making of the agreement.

(3) Where articles have not been registered, a printed copy of every resolution or agreement referred to in

sub-section (1) shall be forwarded to any member at his request, on payment of one rupee. (4) This section shall apply to –

(a) special resolutions ; (b) Resolutions which have been agreed to by all the members of a company, but which, if not so agreed

to, would not have been effective for their purpose unless they had been passed as special resolutions ; (c) Any resolution of the Board of directors of a company or agreement executed by a company, relating to

the appointment, re-appointment or renewal of the appointment, or variation of the terms of appointment, of a managing director ;

(d) [***] (e) resolutions or agreements which have been agreed to by all the members of any class of shareholders

but which, if not so agreed to, would not have been effective for their purpose unless they had been passed by some particular majority or otherwise in some particular manner ; and all resolutions or agreements which effectively bind all the members of any class of shareholders though not agreed to by all those members ;

(ee) Resolutions passed by a company - (i) According consent to the exercise by its Board of directors of any of the powers under clause (a), clause

(d) and clause (e) of sub-section (1) of section 293 ; (ii) Approving the appointment of sole selling agents under section 294 or section 294AA ; (f) Resolutions requiring a company to be wound up voluntarily passed in pursuance of sub-section (1) of

section 484 ; and (g) Copies of the terms and conditions of appointment of a sole selling agent appointed under section 294

or of a sole selling agent or other person appointed under section 294AA.

(5) If default is made in complying with sub-section (1), the company, and every officer of the company who is in default, shall be punishable with fine which may extend to two hundred rupees for every day during which the default continues.

(6) If default is made in complying with sub-section (2) or (3), the company, and every officer of the company

90

who is in default, shall be punishable with fine which may extend to one hundred rupees for each copy in respect of which default is made.

(7) For the purposes of sub-sections (5) and (6), the liquidator of a company shall be deemed to be an officer

of the company. Modification 1. Agreements and resolution related to sole selling agent is now not required to be filed with the registrar 2. Any other resolution or agreement as may be prescribed and placed in the public domain are required to

registered with registrar 3. In case of default Penalty has been made strict in new act i.e. for company 5 lakh to 25 lakh and for every

officer in default , including liquidator of the company if any is 1 lakh to 5 lakh

91

Section - 118. MINUTES OF PROCEEDINGS OF GENERAL MEETING, MEETING OF BOARD OF

DIRECTORS AND OTHER MEETING AND RESOLUTIONS PASSED BY POSTAL BALLOT.

(1) Every company shall cause minutes of the proceedings of every general meeting of any class of

shareholders or creditors, and every resolution passed by postal ballot and every meeting of its Board of Directors or of every committee of the Board, to be prepared and signed in such manner as may be prescribed and kept within thirty days of the conclusion of every such meeting concerned, or passing of resolution by postal ballot in books kept for that purpose with their pages consecutively numbered.

(2) The minutes of each meeting shall contain a fair and correct summary of the proceedings thereat. (3) All appointments made at any of the meetings aforesaid shall be included in the minutes of the meeting. (4) In the case of a meeting of the Board of Directors or of a committee of the Board, the minutes shall also

contain— (a) the names of the directors present at the meeting; and (b) in the case of each resolution passed at the meeting, the names of the directors, if any, dissenting from, or not concurring with the resolution.

(5) There shall not be included in the minutes, any matter which, in the opinion of the Chairman of the

meeting,— (a) is or could reasonably be regarded as defamatory of any person; or (b) is irrelevant or immaterial to the proceedings; or (c) is detrimental to the interests of the company.

(6) The Chairman shall exercise absolute discretion in regard to the inclusion or noninclusion of any matter in

the minutes on the grounds specified in sub-section (5). (7) The minutes kept in accordance with the provisions of this section shall be evidence of the proceedings

recorded therein. (8) Where the minutes have been kept in accordance with sub-section (1) then, until the contrary is proved,

the meeting shall be deemed to have been duly called and held, and all proceedings thereat to have duly

92

taken place, and the resolutions passed by postal ballot to have been duly passed and in particular, all appointments of directors, key managerial personnel, auditors or company secretary in practice, shall be deemed to be valid.

(9) No document purporting to be a report of the proceedings of any general meeting of a company shall be

circulated or advertised at the expense of the company, unless it includes the matters required by this section to be contained in the minutes of the proceedings of such meeting.

(10) Every company shall observe secretarial standards with respect to general and Board meetings specified

by the Institute of Company Secretaries of India constituted under section 3 of the Company Secretaries Act, 1980, and approved as such by the Central Government.

(11) If any default is made in complying with the provisions of this section in respect of any meeting, the

company shall be liable to a penalty of twenty-five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousand rupees.

(12) If a person is found guilty of tampering with the minutes of the proceedings of meeting, he shall be

punishable with imprisonment for a term which may extend to two years and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees.

Applicability Applicable w.e.f 01 April 2014 Applicable Rule 25 of Companies (Management and Administration) Rules, 2014. Rule - 25. Minutes of proceedings of general meeting, meeting of Board of Directors and other meetings

and resolutions passed by postal ballot. (1) (a) A distinct minute book shall be maintained for each type of meeting namely:-

(i) general meetings of the members; (ii) meetings of the creditors (iii) meetings of the Board; and (iv) meetings of each of the committees of the Board.

Explanation - For the proposes of this sub-rule, resolutions passed by postal ballot shall be recorded in the minute book of general meetings as if it has been deemed to be passed in the general meeting.

(b) (i) The minutes of proceedings of each meeting shall be entered in the books maintained for that

purpose along with the date of such entry within thirty days of the conclusion of the meeting. (ii) In case of every resolution passed by postal ballot, a brief report on the postal ballot conducted

including the resolution proposed, the result of the voting thereon and the summary of the scrutinizer’s report shall be entered in the minutes book of general meetings along with the date of such entry within thirty days from the date of passing of resolution.

(d) Each page of every such book shall be initialed or signed and the last page of the record of proceedings

93

of each meeting in such books shall be dated and signed –

(a) in the case of minutes of proceedings of a meeting of the Board or of a committee thereof, by the chairman of the said meeting or the chairman of the next succeeding meeting ;

(b) In the case of minutes of proceedings of a general meeting, by the chairman of the same meeting within the aforesaid period of `thirty' days or in the event of the death or inability of that chairman within that period, by a director duly authorized by the Board for the purpose.

(1B) In no case the minutes of proceedings of a meeting shall be attached to any such book as aforesaid by pasting or otherwise.

(2) The minutes of each meeting shall contain a fair and correct summary of the proceedings thereat. (3) All appointments of officers made at any of the meetings aforesaid shall be included in the minutes of the

meeting. (4) In the case of a meeting of the Board of directors or of a committee of the Board, the minutes shall also

contain – (a) the names of the directors present at the meeting ; and (b) in the case of each resolution passed at the meeting, the names of the directors, if any, dissenting from, or not concurring in, the resolution.

(5) Nothing contained in sub-sections (1) to (4) shall be deemed to require the inclusion in any such minutes of

any matter which, in the opinion of the chairman of the meeting, - (a) is, or could reasonably be regarded as, defamatory of any person ; (b) is irrelevant or immaterial to the proceedings ; or (c) is detrimental to the interests of the company.

Explanation - The chairman shall exercise an absolute discretion in regard to the inclusion or non-inclusion of any matter in the minutes on the grounds specified in this sub-section.

(6) If default is made in complying with the foregoing provisions of this section in respect of any meeting, the

company, and every officer of the company who is in default, shall be punishable with fine which may extend to five hundred Rupees.

Section – 194. Minutes to be evidence Minutes of meetings kept in accordance with the provisions of section 193 shall be evidence of the proceedings recorded therein. Section – 195 Presumptions to be drawn where minutes duly drawn and signed Where minutes of the proceedings of any general meeting of the company or of any meeting of its Board of directors or of a committee of the Board have been kept in accordance with the provisions of section 193, then, until the contrary is proved, the meeting shall be deemed to have been duly called and held, and all proceedings thereat to have duly taken place, and in particular, all appointments of directors or liquidators made at the meeting shall be deemed to be valid.

94

Section - 197. Publication of reports of proceedings of general meetings (1) No document purporting to be a report of the proceedings of any general meeting of a company shall be

circulated or advertised at the expense of the company, unless it includes the matters required by section 193 to be contained in the minutes of the proceedings of such meeting.

(2) If any report is circulated or advertised in contravention of sub-section (1), the company, and every officer

of the company who is in default, shall be punishable, in respect of each offence, with fine which may extend to five thousand rupees.

Modification 1. Along with the minutes of every meeting of its Board of Directors or of every committee of the Board Now

Every company shall also maintain minutes of the proceedings of every general meeting of any class of shareholders or creditors, and every resolution passed by postal ballot.

2. Now company shall observe secretarial standards with respect to general and Board meetings specified by

the ICSI

3. Penalty for not complying with the provision of this section increased from Rs 500 to Rs 25000 for company and for every officer in default from Rs 500 to Rs 5000.

4. If a person is found guilty of tampering with the minutes of the proceedings of meeting, he shall be

punishable with imprisonment for a term which may extend to two years and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees.

95

Section - 119. INSPECTION OF MINUTE-BOOKS OF GENERAL MEETING. (1) The books containing the minutes of the proceedings of any general meeting of a company or of a

resolution passed by postal ballot, shall— (a) be kept at the registered office of the company; and (b) be open, during business hours, to the inspection by any member without charge, subject to such

reasonable restrictions as the company may, by its articles or in general meeting, impose, so, however, that not less than two hours in each business day are allowed for inspection.

(2) Any member shall be entitled to be furnished, within seven working days after he has made a request in

that behalf to the company and on payment of such fees as may be prescribed, with a copy of any minutes referred to in sub-section (1).

(3) If any inspection under sub-section (1) is refused, or if any copy required under sub-section (2) is not

furnished within the time specified therein, the company shall be liable to a penalty of twenty-five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousand rupees for each such refusal or default, as the case may be.

(4) In the case of any such refusal or default, the Tribunal may, without prejudice to any action being taken

under sub-section (3), by order, direct an immediate inspection of the minute-books or direct that the copy required shall forthwith be sent to the person requiring it.

Applicability Applicable w.e.f 01 April 2014 [except sub-section (4)] Applicable Rule No. 26 of Companies (Management and Administration) Rules, 2014. Rule - 26. Copy of minute book of general meeting. Any member shall be entitled to be furnished, within seven working days after he has made a request in that behalf to the company, with a copy of any minutes of any general meeting, on payment of such sum as may be specified in the articles of association of the company, but not exceeding a sum of ten rupees for each page or part of any page: Provided that a member who has made a request for provision of soft copy in respect of minutes of any

96

previous general meetings held during a period immediately preceding three financial years shall be entitled to be furnished, with the same free of cost. Notes on clause This clause corresponds to section 196 of the Companies Act, 1956 and seeks to provide that the minutes book of general meetings shall be kept at the registered office of a company and shall be open for inspection to members during business hours without any charge subject to such restrictions as the company may impose. A member shall be entitled for a copy of any minutes subject to payment of fees. The copy should be made available to him within seven days of his making request. Where the company refuses inspection or fails to furnish a copy of minutes within specified time, the Tribunal is empowered to direct immediate inspection or sending a copy of minutes in the matter and the company and every officer of the company shall be punishable with fine. The Companies Act, 1956 Section - 196. Inspection of minute books of general meetings (1) The books containing the minutes of the proceedings of any general meeting of a company held on or after

the 15th day of January, 1937, shall – (a) be kept at the registered office of the company, and (b) be open, during business hours, to the inspection of any member without charge, subject to such

reasonable restrictions as the company may, by its articles or in general meeting impose, so however that not less than two hours in each day are allowed for inspection.

(2) Any member shall be entitled to be furnished, within seven days after he has made a request in that behalf

to the company, with a copy of any minutes referred to in sub-section (1), on payment of such sum as may be prescribed for every one hundred words or fractional part thereof required to be copied.

(3) If any inspection required under sub-section (1) is refused, or if any copy required under sub-section (2) is

not furnished within the time specified therein, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to five thousand rupees in respect of each offence.

(4) In the case of any such refusal or default, the Central Government may, by order, compel an immediate

inspection of the minute books, or direct that the copy required shall forthwith be sent to the person requiring it.

Modification 1. Along with the books containing minutes of the proceedings of any general meeting of a company as per old

act now minutes of resolution passed by postal ballot shall be kept for inspection. 2. Penalty for company increased from Rs 5000 to Rs 25000 for each default or refusal. 3. Earlier central govt was empowered to order, compel an immediate inspection of the minute books, or direct

that the copy required but now Tribunal is empowered

97

Section – 120. MAINTENANCE AND INSPECTION OF DOCUMENTS IN ELECTRONIC FORM. Without prejudice to any other provisions of this Act, any document, record, register, minutes, etc.,—

(a) Required to be kept by a company; or (b) Allowed to be inspected or copies to be given to any person by a company under this Act, may be kept or

inspected or copies given, as the case may be, in electronic form in such form and manner as may be prescribed.

Applicability Applicable w.e.f 01-04-2014 Applicable Rule No. 27, 28, 29, & 30 Companies (Management and Administration) Rules, 2014. Rule – 27. Maintenance and inspection of document in electronic form. (1) Every listed company or a company having not less than one thousand shareholders, debenture holders and

other security holders, 1“may” maintain its records, as required to be maintained under the Act or rules

made there under, in electronic form.

Explanation - For the purposes of this sub-rule, it is hereby clarified that in case of existing companies,

data 2“may” be converted from physical mode to electronic mode within six months from the date of

notification of provisions of section 120 of the Act.

(2) The records in electronic form shall be maintained in such manner as the Board of directors of the company may think fit,

Provided that – (a) the records are maintained in the same formats and in accordance with all other requirements as

provided in the Act or the rules made there under; (b) the information as required under the provisions of the Act or the rules made there under should be

adequately recorded for future reference; (c) the records must be capable of being readable, retrievable and reproducible in printed form; (d) the records are capable of being dated and signed digitally wherever it is required under the provisions

of the Act or the rules made there under;

98

(e) the records, once dated and signed digitally, shall not be capable of being edited or altered;

(f) the records shall be capable of being updated, according to the provisions of the Act or the rules made

there under, and the date of updating shall be capable of being recorded on every updating.

Explanation - For the purpose of this rule, the term "records” means any register, index, agreement, memorandum, minutes or any other document required by the Act or the rules made there under to be kept by a company.

Rule – 28 Security of records maintained in electronic form. (1) The Managing Director, Company Secretary or any other director or officer of the company as the Board

may decide shall be responsible for the maintenance and security of electronic records.

(2) The person who is responsible for the maintenance and security of electronic records shall- (a) provide adequate protection against unauthorized access, alteration or tampering of records; (b) ensure against loss of the records as a result of damage to, or failure of the media on which the records

are maintained; (c) ensure that the signatory of electronic records does not repudiate the signed record as not genuine; (d) ensure that computer systems, software and hardware are adequately secured and validated to ensure

their accuracy, reliability and consistent intended performance; (e) ensure that the computer systems can discern invalid and altered records; (f) ensure that records are accurate, accessible, and capable of being reproduced for reference later; (g) ensure that the records are at all times capable of being retrieved to a readable and printable form; (h) Ensure that records are kept in a non-rewriteable and non-erasable format like pdf. version or some

other version which cannot be altered or tampered; (i) ensure that at least one backup, taken at a periodicity of not exceeding one day, are kept of the updated

records kept in electronic form, every backup is authenticated and dated and such backups shall be securely kept at such places as may be decided by the Board;

(j) limit the access to the records to the managing director, company secretary or any other director or officer or persons performing work of the company as may be authorized by the Board in this behalf;

(k) ensure that any reproduction of non-electronic original records in electronic form is complete, authentic, true and legible when retrieved;

(l) arrange and index the records in a way that permits easy location, access and retrieval of any particular record; and

(m) Take necessary steps to ensure security, integrity and confidentiality of records. Rule – 29 Inspection and copies of records maintained in electronic form. Where a company maintains its records in electronic form, any duty imposed by the Act or rules made there under to make those records available for inspection or to provide copies of the whole or a part of those records, shall be construed as a duty to make the records available for inspection in electronic form or to provide copies of those records containing a clear reproduction of the whole or part thereof, as the case may be on payment of not exceeding ten rupees per page

99

Rule – 30 Penalty If any default is made in compliance with any of the provisions of this rule, the company and every officers or such other person who is in default shall be punishable with fine which may extend to five thousand rupees and where the contravention is a continuing one, with a further fine which may extend to five hundred rupees for every day after the first during which such contravention continues. Notes on clause This is a new clause which seeks to provide that any document, record, register or minute, etc., required to be kept or allowed to be inspected or copies given may be kept or inspected or copies given in the electronic form in the prescribed manner. NOTE :- 1&2) Substituted for the word “shall” by Companies (Management and administration) Second Amendment Rules, 2014 vide Notification No. G.S.R. 537(E) dated 24.07.2014. Comments Although it is restriction on the company to maintain any documents, records, minutes , registers etc in electronic form but on other side it will save company time and money.

100

Section – 121. REPORT ON ANNUAL GENERAL MEETING. (1) Every listed public company shall prepare in the prescribed manner a report on each annual general

meeting including the confirmation to the effect that the meeting was convened, held and conducted as per the provisions of this Act and the rules made there under.

(2) The company shall file with the Registrar a copy of the report referred to in subsection (1) within thirty

days of the conclusion of the annual general meeting with such fees as may be prescribed, or with such additional fees as may be prescribed, within the time as specified, under section 403.

(3) If the company fails to file the report under sub-section (2) before the expiry of the period specified under

section 403 with additional fee, the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees.

Applicability Applicable w.e.f 01 April 2014 Applicable Rule No. 31 of Companies (Management and Administration) Rules, 2014. Rule - 31. Report on Annual General Meeting. (1) The report in pursuance of the provisions of sub-section (1) of section 121 shall be prepared in the following manner, namely:-

(a) the report under this section shall be prepared in addition to the minutes of the general meeting; (b) the report shall be signed and dated by the Chairman of the meeting or in case of his inability to sign,

by any two directors of the company, one of whom shall be the Managing director, if there is one and company secretary of the company;

(c) the report shall contain the details in respect of the following, namely:-

(i) the day, date, hour and venue of the annual general meeting; (ii) confirmation with respect to appointment of Chairman of the meeting; (iii) number of members attending the meeting; (iv) confirmation of quorum;

101

(v) confirmation with respect to compliance of the Act and the Rules, secretarial standards made

there under with respect to calling, convening and conducting the meeting; (vi) business transacted at the meeting and result thereof; (vii) particulars with respect to any adjournment, postponement of meeting, change in venue; and (viii) any other points relevant for inclusion in the report.

(d) The Report shall contain fair and correct summary of the proceedings of the meeting. (2) The copy of the report prepared in pursuance of sub-section (1) of section 121 and sub-rule (1), shall be

filed with the Registrar in Form No. MGT.15 within thirty days of the conclusion of the annual general meeting along with the fee.

Notes on clause This new clause seeks to provide that every listed company shall prepare a report on each annual general meeting including the confirmation to the effect that the meeting was convened, held and conducted as per the provision of the Act and the rules made there under. A copy of this report shall be filed with the Registrar. The clause also provides penalty if company fails to file the report under this clause before the expiry of the period specified under clause 403.

102

Section - 122. APPLICABILITY OF THIS CHAPTER TO ONE PERSON COMPANY (1) The provisions of section 98 and sections 100 to 111 (both inclusive) shall not apply to a One Person

Company. (2) The ordinary businesses as mentioned under clause (a) of sub-section (2) of section 102 which a company,

other than a One Person Company, is required to transact at its annual general meeting, shall be transacted, in case of One Person Company, as provided in sub-section (3).

(3) For the purposes of section 114, any business which is required to be transacted at an annual general

meeting or other general meeting of a company by means of an ordinary or special resolution, it shall be sufficient if, in case of One Person Company, the resolution is communicated by the member to the company and entered in the minutes-book required to be maintained under section 118 and signed and dated by the member and such date shall be deemed to be the date of the meeting for all the purposes under this Act.

(4) Notwithstanding anything in this Act, where there is only one director on the Board of Director of a One

Person Company, 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 One Person Company, the resolution by such director is entered in the minutes-book required to be maintained under section 118 and signed and dated by such director and such date shall be deemed to be the date of the meeting of the Board of Directors for all the purposes under this Act.

Applicability Applicable w.e.f 01 April 2014 Notes on clause This new clause seeks to provide that the provisions of some sections of Chapter VII i.e. Management and Administration shall be applicable to One Person Company to the extent and the manner as provided under the clause.