COMPANIES ACT, 1956
(1) This Act may be called the Companies Act, 1956.
(2) It shall come into force on such date1 as the Central Government may, by notification in the Official Gazette, appoint.
2[(3) It extends to the whole of India:]
3[***]
4[Provided 5[***] that it shall apply to the State of Nagaland subject to such modifications, if any, as the Central Government may, by notification in the Official Gazette, specify.]
--------------------------------
1. Came into force on 1-4-1956 vide S.R.O. 612, dated 8th March, 1956, published in the Gazette of India, Extra. 1956, Pt. II, Sec. 3, p. 473.
2. Subs. by Act 62 of 195
In this Act, unless the context otherwise requires,—
1[(1) “abridged prospectus” means a memorandum containing such salient features of a prospectus as may be prescribed;]
2[(1A)] “alter” and “alteration” shall include the making of additions and omissions;
3[(1B) “Appellate Tribunal” means the National Company Law Appellate Tribunal constituted under sub-section (1) of section 10FR;]
(2) “articles” means the articles of association of a company as originally framed or as altered from time to time in pursuance of any previous companies law or of this Act, including, so far as they apply to the company, the regulations contained, as the case may be, in the Table B in the Schedule annexed to Act No. 19 of 1857 or in Table A in the First Sc
Words and expressions used and not defined in this Act but defined in the Depositories Act, 1996 (22 of 1996) shall have the same meanings respectively assigned to them in that Act.]
--------------------------------------
1. Ins. by Act 22 of 1996, sec. 30 and Sch. (w.r.e.f. 20-9-1995).
-------------------------------------
(1) In this Act, unless the context otherwise requires, the expressions “company”, “existing company”, “private company” and “public company” shall, subject to the provisions of sub-section (2), have the meanings specified below:
(i) “company” means a company formed and registered under this Act or an existing company as defined in clause (ii);
(ii) “existing company” means a company formed and registered under any of the previous companies laws specified below:
(a) any Act or Acts relating to companies in force before the Indian Companies Act, 1866 (10 of 1866) and repealed by the Act;
(b) the Indian Companies Act, 1866 (10 of 1866);
(c) the Indian Companies Act, 1882 (6 of 1882);
(1) For the purposes of this Act, a company shall, subject to the provisions of sub-section (3), be deemed to be a subsidiary of another if, but only if,—
(a) that other controls the composition of its Board of directors; or
1 [(b) that other—
(i) where the first-mentioned company is an existing company in respect of which the holders of preference shares issued before the commencement of this Act have the same voting rights in all respects as the holders of equity shares, exercises or controls more than half of the total voting power of such company;
(ii) where the first-mentioned company is any other company, holds more than half in nominal value of its equity share capital; or]
(c) the first-menti
(1) Each of the financial institutions specified in this sub-section shall be regarded, for the purposes of this Act, as a public financial institution, namely:—
(i) the Industrial Credit and Investment Corporation of India Limited, a company formed and registered under the Indian Companies Act, 1913 (7 of 1913);
(ii) the Industrial Finance Corporation of India, established under section 3 of the Industrial Finance Corporation Act, 1948 (7 of 1948);
(iii) the Industrial Development Bank of India, established under section 3 of the Industrial Development Bank of India Act, 1964 (18 of 1964);
(iv) the Life Insurance Corporation of India, established under section 3 of the Life Insurance Corporation Act, 1956 (31 of 1956);
&n
For the purpose of any provision in this Act which enacts that an officer of the company who is in default shall be liable to any punishment or penalty, whether by way of imprisonment, fine or otherwise, the expression “officer who is in default” means all the following officers of the company, namely:—
(a) the managing director or managing directors;
(b) the whole-time director or whole-time directors;
(c) the manager;
(d) the secretary;
(e) any person in accordance with whose directions or instructions the Board of directors of the company is accustomed to act;
(f) any person charged by the Board with the responsibility of complying with tha
A person shall be deemed to be a relative of another if, and only if,—
(a) they are members of a Hindu undivided family; or
(b) they are husband and wife; or
(c) the one is related to the other in the manner indicated in Schedule IA.]
---------------------------------------
1. Subs. by Act 65 of 1960, sec. 4, for section 6 (w.e.f. 28-12-1960).
---------------------------------------
Except where this Act expressly provides otherwise, a person shall not be deemed to be, within the meaning of any provision in this Act, a person in accordance with whose directions or instructions the Board of directors of a company is accustomed to act, by reason only that the Board acts on advice given by him in a professional capacity.
The Central Government may, by order, declare that in the case of any company, 1[***] any establishment carrying on either the same or substantially the same activity as that carried on by the head office of the company, or 2[any establishment engaged in any production, processing or manufacture], shall not be treated as a branch office of the company for all or any of the purposes of this Act.
---------------------------------
1. The words “not being a banking or an insurance company” omitted by Act 65 of 1960, sec. 5 (w.e.f. 28-12-1960).
2. Subs. by Act 65 of 1960, sec. 5, for “any production or manufacture” (w.e.f. 28-12-1960).
Save as otherwise expressly provided in the Act—
(a) the provisions of this Act shall have effect notwithstanding anything to the contrary contained in the memorandum or articles of a company, or in any agreement executed by it, or in any resolution passed by the company in general meeting or by its Board of directors, whether the same be registered, executed or passed, as the case may be, before or after the commencement of this Act; and
(b) any provision contained in the memorandum, articles, agreement or resolution aforesaid shall, to the extent to which it is repugnant to the provisions of this Act, become or be void, as the case may be.
(1) The Court having jurisdiction under this Act shall be—
(a) the High Court having jurisdiction in relation to the place at which the registered office of the company concerned is situate, except to the extent to which jurisdiction has been conferred on any District Court or District Courts subordinate to that High Court in pursuance of sub-section (2); and
(b) where jurisdiction has been so conferred, the District Court in regard to matters falling within the scope of the jurisdiction conferred, in respect of companies having their registered offices in the district.
(2) The Central Government may, by notification in the Official Gazette and subject to such restrictions, limitations and conditions as it thinks fit, empower any District Court to exercise all or any of the jurisdiction
[Rep. by the Companies Tribunal (Abolition) Act, 1967 (17 of 1967), sec. 4 and Sch. (w.e.f. 1-7-1967).]]
------------------------------
1. Sections 10A to 10D ins. by Act 53 of 1963, sec. 3 (w.e.f. 1-1-1964).
------------------------------
[Rep. by the Companies Tribunal (Abolition) Act, 1967 (17 of 1967), sec. 4 and Sch. (w.e.f. 1-7-1967).]]
------------------------------
1. Sections 10A to 10D ins. by Act 53 of 1963, sec. 3 (w.e.f. 1-1-1964).
------------------------------
[Rep. by the Companies Tribunal (Abolition) Act, 1967 (17 of 1967), sec. 4 and Sch. (w.e.f. 1-7-1967).]]
------------------------------
1. Sections 10A to 10D ins. by Act 53 of 1963, sec. 3 (w.e.f. 1-1-1964).
------------------------------
[Rep. by the Companies Tribunal (Abolition) Act, 1967 (17 of 1967), sec. 4 and Sch. (w.e.f. 1-7-1967).]]
------------------------------
1. Sections 10A to 10D ins. by Act 53 of 1963, sec. 3 (w.e.f. 1-1-1964).
------------------------------
2[(1) As soon as may be after the commencement of the Companies (Amendment) Act, 1988, the Central Government shall by notification in the Official Gazette, constitute a Board to be called the Board of Company Law Administration.
(1A) The Company Law Board shall exercise and discharge such powers and functions as may be 3[conferred on it before the commencement of the Companies (Second Amendment) Act, 2002,] by or under this Act or any other law, and shall also exercise and discharge such other powers and functions of the Central Government under this Act or any other law as may be 2[conferred on it before the commencement of the Companies (Second Amendment) Act, 2002] by the Central Government by notification in the Official Gazette under the provisions of this Act or that other law.]
(2) The Company Law Board shall consist of such numb
Any person aggrieved by any decision or order of the Company Law Board 2[made before the commencement of the Companies (Second Amendment) Act, 2002] may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Company Law Board to him on any question of law arising out of such order:
Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.]
------------------------------
1. Ins. by Act 31 of 1988, sec. 5 (w.e.f. 4-8-1989).
2. Ins. by Act 11 of 2003, sec. 4.
--------------
(1) On and from the commencement of the Companies (Second Amendment) Act, 2002, the Board of Company Law Administration constituted under sub-section (1) of section 10E shall stand dissolved.
(2) On the dissolution of the Company Law Board, the persons appointed as Chairman, Vice-Chairman and members and officers and other employees of that Board are holding office as such immediately before such commencement shall vacate their respective offices and no such Chairman, Vice-Chairman and member and officer and other employee shall be entitled to claim any compensation for the premature termination of the term of his office or of any contract of service:
Provided that every officer or other employee, who has been, immediately before the dissolution of the Company Law Board, appointed on deputation basis to that Board, shall, on such dissolu
The Central Government shall, by notification in the Official Gazette, constitute a Tribunal to be known as the National Company Law Tribunal to exercise and discharge such powers and functions as are, or may be, conferred on it by or under this Act or any other law for the time being in force.]
----------
----------------------
1. Section 10FB ins. by Act 11 of 2003, sec. 6 (w.e.f. 1-4-2003).
(1) The Central Government shall appoint a person who has been, or is qualified to be, a Judge of a High Court as the President of the Tribunal.
(2) A person shall not be qualified for appointment as Judicial Member unless he—
(a) has, for at least fifteen years, held a judicial office in the territory of India; or
(b) has, for at least ten years been an advocate of a High Court, or has partly held judicial office and has been partly in practice as an advocate for a total period of fifteen years; or
(c) has held for at least fifteen years a Group ‘A’ post or an equivalent post under the Central Government or a State Government [including at least three years of service as a Member of the Indian Company Law Service (Legal Branch) in Senior G
"Introduction" - Section 10-F provides a right of appeal to the High Court from orders of the Company Law Board (CLB) under the Companies Act, 1956. The purpose is to rectify errors of law arising in CLB orders. [Dirak Dieter Ramsauer Konstruktion selemente GmbH Company in Germany VS S. D. Chakravarthy] [Bhenoy G. Dembla & another VS Prem Kutir P. Ltd]
"Purpose of Section 10-F" - An appeal under 10-F lies against the main order on a petition and enables the High Court to examine questions of law arising from that order. The remedy is not a general challenge to every interlocutory step but focused on legal questions flowing from the core decision. [Dirak Dieter Ramsauer Konstruktion selemente GmbH Company in Germany VS S. D. Chakravarthy] [Bhenoy G. Dembla & another VS Prem Kutir P. Ltd]
"Main order only" - The appellate right under Section 10-F is limited to the main order passed by the CLB on a petition; it does not extend to every order or ruling issued during the pendency of the petition. If the impugned order merely directs adherence to procedure or performs a procedural/clarificatory function, it may not be a subject of Section 10-F. [Dirak Dieter Ramsauer Konstruktion selemente GmbH Company in Germany VS S. D. Chakravarthy]
"Questions of law only" - The maintainability of a Section 10-F appeal requires the presence of a substantial question of law; questions of fact are generally not permissible on appeal under 10-F. This principle is reinforced by case law emphasizing that an appeal under 10-F should involve questions of law, not re-evaluation of factual findings. [MOHAN LAL MITTAL VS UNIVERSAL WIRES LTD. ] [BELTAS MERCHANTS PRIVATE LIMITED VS INDIAN FIBRES LIMITED]
"Perverse findings exception" - The CLB’s findings on questions of fact may be reviewed by the High Court if they are perverse or unsupported by evidence; otherwise, factual findings are ordinarily binding. This exception supports the possibility of a Section 10-F appeal when a legal point arises from such perverse findings. [BELTAS MERCHANTS PRIVATE LIMITED VS INDIAN FIBRES LIMITED]
"Maintainability prerequisite" - A prerequisite for invoking Section 10-F is the existence of a bona fide question of law arising from the CLB order; mere disagreement with findings of fact or with discretionary aspects may not suffice. This requirement is reflected in decisions discussing the need for a question of law to justify an appeal under 10-F. [MOHAN LAL MITTAL VS UNIVERSAL WIRES LTD. ]
"Case example – main order focus" - In a representative ruling, the court held that an appeal under Section 10-F can be filed against the main order on a petition, not against all interlocutory orders, illustrating the limited and targeted scope of 10-F appeals. [Dirak Dieter Ramsauer Konstruktion selemente GmbH Company in Germany VS S. D. Chakravarthy]
"Case example – maintainability and law vs. fact" - Courts have indicated that Section 10-F appeals are not maintainable where the appeal challenges only findings of fact or seeks to reweigh evidence; the appeal must turn on a question of law. This is reflected in discussions distinguishing questions of law from questions of fact in 10-F appeals. [MOHAN LAL MITTAL VS UNIVERSAL WIRES LTD. ]
"Case example – use in practice" - The doctrine has been applied in various contexts, including confirming that an appeal under Section 10-F can challenge CLB’s interpretation of legal provisions or its application of law to the facts, provided a legal question is identified. This is illustrated by appellate decisions recognizing Section 10-F as a vehicle for correcting legal errors. [Bhenoy G. Dembla & another VS Prem Kutir P. Ltd]
"Function of CLB findings" - The CLB’s role in determining issues of fact remains substantial; however, when its application of law is in question, Section 10-F provides a route to a higher court to review that legal issue. The distinction between factual sufficiency and legal error is central to 10-F discussions. [MOHAN LAL MITTAL VS UNIVERSAL WIRES LTD. ] [BELTAS MERCHANTS PRIVATE LIMITED VS INDIAN FIBRES LIMITED]
"Connection to the petition" - The 10-F remedy is tied to orders arising from petitions under the Companies Act; it is not a vehicle for collaterally challenging unrelated actions or orders arising outside the petition context. This principle is reflected in cases limiting 10-F to main orders on petitions. [Dirak Dieter Ramsauer Konstruktion selemente GmbH Company in Germany VS S. D. Chakravarthy]
"Practical consequence for shareholders" - While 10-F protects against legal error in CLB orders, it does so within a narrow ambit (questions of law only). Shareholders seeking relief must frame their challenge as a legal error rather than a request to re-litigate facts, as demonstrated by cited precedents. [Dirak Dieter Ramsauer Konstruktion selemente GmbH Company in Germany VS S. D. Chakravarthy] [MOHAN LAL MITTAL VS UNIVERSAL WIRES LTD. ]
"Interplay with other jurisprudence" - The Section 10-F framework interacts with broader principles on appellate review of tribunal decisions (e.g., the role of the High Court in correcting legal misapplications) and has been discussed in light of prior landmark authorities, including references to Scindia and related jurisprudence. This contextual backdrop is referenced in the authorities discussing the requirement of a question of law for maintainability. [MOHAN LAL MITTAL VS UNIVERSAL WIRES LTD. ] [BELTAS MERCHANTS PRIVATE LIMITED VS INDIAN FIBRES LIMITED]
"Judicial stance on procedural orders" - Courts have noted that while CLB orders directing compliance with procedures or requiring adherence to law are legitimate, they are not automatically grounds for 10-F appeal unless a substantial legal question arises from such orders or the main order on the petition. This nuance is highlighted in the discussion of main order versus procedural directives. [Dirak Dieter Ramsauer Konstruktion selemente GmbH Company in Germany VS S. D. Chakravarthy]
The President and every other Member of the Tribunal shall hold office as such for a term of three years from the date on which he enters upon his office but shall be eligible for re-appointment:
Provided that no President or other Member shall hold office as such after he has attained,—
(a) in the case of the President, the age of sixty-seven years;
(b) in the case of any other Member, the age of sixty-five years:
Provided further that the President or other Member may retain his lien with his parent cadre or Ministry or Department, as the case may be, while holding office as such.]
----------
----------------------
&nbs
The Central Government shall designate any Judicial Member or Technical Member as Member Administration who shall exercise such financial and administrative powers as may be vested in him under the rules which may be made by the Central Government:
Provided that the Member Administration shall have authority to delegate such of his financial and administrative powers as he may think fit to any other officer of the Tribunal subject to the condition that such officer shall, while exercising such delegated powers, continue to act under the direction, superintendence and control of the Member Administration.
----------
----------------------
1. Section 10FF ins. by Act 11 of 2003, sec. 6 (w.e.f.
(1) The Tribunal and the Appellate Tribunal shall not be bound by the procedure laid down in the Code of Civil Procedure, 1908 (5 of 1908) but shall be guided by the principles of natural justice and, subject to the other provisions of this Act and of any rules made by the Central Government, the Tribunal and the Appellate Tribunal shall have power to regulate their own procedure.
(2) The Tribunal and the Appellate Tribunal shall have, for the purposes of discharging its functions under this Act, the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit respect of the following matters, namely:—
(a) summoning and enforcing the attendance of any person and examining him on oath;
(b) requiring the discovery and production of docu
The salary and allowances and other terms and conditions of service of the President and other Members of the Tribunal shall be such as may be prescribed:
Provided that neither the salary and allowances nor the other terms and conditions of service of the President and other Members shall be varied to their disadvantage after their appointment.
---------- ----------------------
1. Section 10FG ins. by Act 11 of 2003, sec. 6 (w.e.f. 1-4-2003).
(1) In the event of the occurrence of any vacancy in the office of the President of the Tribunal by reason of his death, resignation or otherwise, the senior-most Member shall act as the President of the Tribunal until the date on which a new President, appointed in accordance with the provisions of this Act to fill such vacancy, enters upon his office.
(2) When the President is unable to discharge his functions owing to absence, illness or any other cause, the senior-most Member or, as the case may be, such one of the Members of the Tribunal, as the Central Government, may, by notification, authorise in this behalf, shall discharge the functions of the President until the date on which the President resumes his duties.
(3) If, for reason other than temporary absence, any vacancy occurs in the office of the President or a Member, the Cen
The President or a Member of the Tribunal may, by notice in writing under his hand addressed to the Central Government, resign his office:
Provided that the President or a Member shall, unless he is permitted by the Central Government to relinquish his office sooner, continue to hold office until the expiry of three months from the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of the term of office, whichever is the earliest.]
----------
----------------------
1. Section 10FI ins. by Act 11 of 2003, sec. 6 (w.e.f. 1-4-2003).
(1) The Central Government may, in consultation with the Chief Justice of India, remove from office the President or any Member of the Tribunal, who—
(a) has been adjudged an insolvent; or
(b) has been convicted of an offence which, in the opinion of the Central Government, involves moral turpitude; or
(c) has become physically or mentally incapable of acting as such President or Member of the Tribunal; or
(d) has acquired such financial or other interest as is likely to affect prejudicially his functions as such President or Member of the Tribunal; or
(e) has so abused his position as to render his continuance in office prejudicial to the public interest:
&
(1) The Central Government shall provide the Tribunal with such officers and other employees as it may deem fit.
(2) The officers and other employees of the Tribunal shall discharge their functions under the general superintendence of the Member Administration.
(3) The salaries and allowances and other terms and conditions of service of the officers and other employees of the Tribunal shall be such as may be prescribed.]
----------
----------------------
1. Section 10FK ins. by Act 11 of 2003, sec. 6 (w.e.f. 1-4-2003).
(1) Subject to the provisions of this section, the powers of the Tribunal may be exercised by Benches, constituted by the President of the Tribunal, out of which one shall be a Judicial Member and another shall be a Technical Member referred to in clauses (a) to (f) of sub-section (3) of section 10FD:
Provided that it shall be competent for the Members authorised in this behalf to function as a Bench consisting of a single Member and exercise the jurisdiction, powers and authority of the Tribunal in respect of such class of cases or such matters pertaining to such class of cases, as the President of the Tribunal may, by general or special order, specify:
Provided further that if at any stage of the hearing of any such case or matter, it appears to the Member of the Tribunal that the case or matter is of such a nature that it ought to be
(1) The Tribunal may, after giving the parties to any proceeding before it, an opportunity of being heard, pass such orders thereon as it thinks fit.
(2) The Tribunal may, at any time within two years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice by the parties.
(3) The Tribunal shall send a copy of every order passed under this section to all the parties concerned.]
----------
----------------------
1. Section 10FM ins. by Act 11 of 2003, sec. 6 (w.e.f. 1-4-2003).
The Tribunal shall have power to review its own orders.]
----------
----------------------
1. Section 10FN ins. by Act 11 of 2003, sec. 6 (w.e.f. 1-4-2003).
The Tribunal may, by general or special order, delegate, subject to such conditions and limitations, if any, as may be specified in the order, to any Member or officer or other employee of the Tribunal or other person authorised by the Tribunal to manage any industrial company or industrial undertaking or any operating agency, such powers and duties under this Act as it may deem necessary.]
----------
----------------------
1. Section 10FO ins. by Act 11 of 2003, sec. 6 (w.e.f. 1-4-2003).
(1) The Tribunal or any operating agency, on being directed by the Tribunal may, in order to take into custody or under its control all property, effects and actionable claims to which a sick industrial company is or appears to be entitled, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any property, books of account or any other document of such sick industrial company, be situate or be found, to take possession thereof, and the Chief Metropolitan Magistrate or the District Magistrate, as the case may be, shall, on such request being made to him,—
(a) take possession of such property, books of account or other documents; and
(b) cause the same to be entrusted to the Tribunal or the operating agency.
(2) For the purpose of secu
(1) Any person aggrieved by an order or decision of the Tribunal may prefer an appeal to the Appellate Tribunal.
(2) No appeal shall lie to the Appellate Tribunal from an order or decision made by the Tribunal with the consent of parties.
(3) Every appeal under sub-section (1) shall be filed within a period of forty-five days from the date on which a copy of the order or decision made by the Tribunal is received by the appellant and it shall be in such form and accompanied by such fee as may be prescribed:
Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period of forty-five days from the date aforesaid if it is satisfied that the appellant was prevented by sufficient cause from not filing the appeal in time.
(1) In the event of the occurrence of any vacancy in the office of the Chairperson of the Appellate Tribunal by reason of his death, resignation or otherwise, the senior-most Member of the Appellate Tribunal shall act as the Chairperson of the Appellate Tribunal until the date on which a new Chairperson appointed in accordance with the provisions of this Act to fill such vacancy enters upon his office.
(2) When the Chairperson of the Appellate Tribunal is unable to discharge his functions owing to absence, illness or any other cause, the senior-most Member or, as the case may be, such one of the Member of the Appellate Tribunal, as the Central Government may, by notification, authorise in this behalf, shall discharge the functions of the Chairperson until the date on which the Chairperson resumes his duties.
(3) If, for reason other than
The Chairperson or a Member of the Appellate Tribunal shall hold office as such for a term of three years from the date on which he enters upon his office, but shall be eligible for re-appointment for another term of three years:
Provided that no Chairperson or other Member shall hold office as such after he has attained,—
(a) in the case of the Chairperson, the age of seventy years;
(b) in the case of other Member, the age of sixty-seven years.]
----------
----------------------
1. Section 10FT ins. by Act 11 of 2003, sec. 6 (w.e.f. 1-4-2003).
The Chairperson or a Member of the Appellate Tribunal may, by notice in writing under his hand addressed to the Central Government, resign his office:
Provided that the Chairperson or a Member of the Appellate Tribunal shall, unless he is permitted by the Central Government to relinquish his office sooner, continue to hold office until the expiry of three months from the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his term of office, whichever is the earliest.]
----------
----------------------
1. Section 10FU ins. by Act 11 of 2003, sec. 6 (w.e.f. 1-4-2003).
(1) The Central Government may, in consultation with the Chief Justice of India, remove from office the Chairperson or any Member of the Appellate Tribunal, who—
(a) has been adjudged an insolvent; or
(b) has been convicted of an offence which, in the opinion of the Central Government, involves moral turpitude; or
(c) has become physically or mentally incapable of acting as such Chairperson or Member of the Appellate Tribunal; or
(d) has acquired such financial or other interest as is likely to affect prejudicially his functions as such Chairperson or Member of the Appellate Tribunal; or
(e) has so abused his position as to render his continuance in office prejudicial to the public intere
(1) The salary and allowances and other terms and conditions of service of the Chairperson and other Members of the Appellate Tribunal shall be such as may be prescribed.
(2) The salary, allowances and other terms and conditions of service of the Chairperson and other Members of the Appellate Tribunal shall not be varied to their disadvantage after appointment.]
----------
----------------------
1. Section 10FW ins. by Act 11 of 2003, sec. 6 (w.e.f. 1-4-2003).
(1) The Chairperson and Members of the Appellate Tribunal and President and Members of the Tribunal shall be appointed by the Central Government on the recommendations of a Selection Committee consisting of—
(a) Chief Justice of India or his nominee ... Chairperson;
(b) Secretary in the Ministry of Finance
and Company Affairs ... Member;
(c) Secretary in the Ministry of Labour ... Member;
(d) Secretary in the Ministry of Law and
Justice (Department of Legal Affairs
or Legis
The Chairperson, Members, officers and other employees of the Appellate Tribunal and the President, Members, officers and other employees of the Tribunal shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code (45 of 1860).]
----------
----------------------
1. Section 10FY ins. by Act 11 of 2003, sec. 6 (w.e.f. 1-4-2003).
No suit, prosecution or other legal proceedings shall lie against the Appellate Tribunal or its Chairperson, Member, officer or other employee or against the Tribunal, its President, member, officer or other employee or operating agency or liquidator or any other person authorised by the Appellate Tribunal or the Tribunal in the discharge of any function under this Act for any loss or damage caused or likely to be caused by any act which in good faith done or intended to be done in pursuance of this Act.]
----------
----------------------
1. Section 10FZ ins. by Act 11 of 2003, sec. 6 (w.e.f. 1-4-2003).
The Tribunal shall consist of a President and such number of Judicial and Technical Members not exceeding sixty-two, as the Central Government deems fit, to be appointed by that Government, by notification in the Official Gazette.]
----------
----------------------
1. Section 10FC ins. by Act 11 of 2003, sec. 6 (w.e.f. 1-4-2003.
(1) The Central Government shall, by notification in the Official Gazette, constitute with effect from such date as may be specified therein, an Appellate Tribunal to be called the “National Company Law Appellate Tribunal” consisting of a Chairperson and not more than two Members, to be appointed by that Government, for hearing appeals against the orders of the Tribunal under this Act.
(2) The Chairperson of the Appellate Tribunal shall be a person who has been, a Judge of the Supreme Court or the Chief Justice of a High Court.
(3) A Member of the Appellate Tribunal shall be a person of ability, integrity and standing having special knowledge of, and professional experience of not less than twenty-five years in, science, technology, economics, banking, industry, law, matters relating to labour, industrial finance, industrial management,
The Appellate Tribunal shall have the same jurisdiction, powers and authority in respect of contempt of itself as the High Court has and may exercise, for this purpose under the provisions of the Contempt of Courts Act, 1971 (70 of 1971), shall have the effect subject to modifications that—
(a) the reference therein to a High Court shall be construed as including a reference to the Appellate Tribunal;
(b) the reference to Advocate-General in section 15 of the said Act shall be construed as a reference to such law officers as the Central Government may specify in this behalf.]
----------
----------------------
1. Section 10G ins. by Act 11 of
(1) The Central Government shall provide the Appellate Tribunal with such officers and other employees as it may think fit.
(2) The officers and other employees of the Appellate Tribunal shall discharge their functions under the general superintendence of the Chairperson of the Appellate Tribunal.
(3) The salaries and allowances and other conditions of service of the officers and other employees of the Appellate Tribunal shall be such as may be prescribed.]
----------
----------------------
1. Section 10GA ins. by Act 11 of 2003, sec. 6 (w.e.f. 1-4-2003).
(1) No Civil Court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal or the Appellate Tribunal is empowered to determine by or under this Act or any other law for the time being in force and no injunction shall be granted by any Court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or any other law for the time being in force.]
----------
----------------------
1. Section 10GB ins. by Act 11 of 2003, sec. 6 (w.e.f. 1-4-2003).
The applicant or the appellant may either appear in person or authorise one or more chartered accountants or company secretaries or cost accountants or legal practitioners or any officer to present his or its case before the Tribunal or the Appellate Tribunal, as the case may be.
Explanation.—For the purposes of this section,—
(a) “chartered accountant” means a chartered accountant as defined in clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949) and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act;
(b) “company secretary” means a company secretary as defined in clause (c) of sub-section (1) of section 2 of the Companies Secretaries Act, 1980 (56 of 1980) and who has obtained a certificate of practice und
The provisions of the Limitation Act, 1963 (36 of 1963) shall, as far as may be, apply to an appeal made to the Appellate Tribunal.]
----------
----------------------
1. Section 10GE ins. by Act 11 of 2003, sec. 6 (w.e.f. 1-4-2003).
Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the Supreme Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal to him on any question of law arising out of such decision or order:
Provided that the Supreme Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.]
----------
----------------------
1. Section 10GF ins. by Act 11 of 2003, sec. 6 (w.e.f. 1-4-2003).
No act or proceeding of the Tribunal or the Appellate Tribunal shall be questioned or shall be invalid merely on the ground of existence of any vacancy or defect in the establishment of the Tribunal or the Appellate Tribunal, as the case may be.]
----------
----------------------
1. Section 10GC ins. by Act 11 of 2003, sec. 6 (w.e.f. 1-4-2003).
(1) No company, association or partnership consisting of more than ten persons shall be formed for the purpose of carrying on the business of banking, unless it is registered as a company under this Act, or is formed in pursuance of some other Indian Law.
(2) No company, association or partnership consisting of more than twenty persons shall be formed for the purpose of carrying on any other business that has for its object the acquisition of gain by the company, association or partnership or by the individual members thereof, unless it is registered as a company under this Act, or is formed in pursuance of some other Indian law.
(3) This section shall not apply to a joint family as such carrying on a business; and where a business is carried on by two or more joint families, in computing the number of persons for the purposes of sub-sec
(1) Any seven or more persons, or where the company to be formed will be a private company, any two or more persons, associated for any lawful purpose may, by subscribing their names to a memorandum of association and otherwise complying with the requirements of this Act in respect of registration, form an incorporated company, with or without limited liability.
(2) Such a company may be either—
(a) a company having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them (in this Act termed “a company limited by shares”);
(b) a company having the liability of its members limited by the memorandum to such amount as the members may respectively undertake by the memorandum to contribute to the assets of the company in the
(1) The memorandum of every company shall state—
(a) the name of the company with “Limited” as the last word of the name in the case of a public limited company, and with “Private Limited” as the last word of the name in the case of a private limited company;
(b) the State in which the registered office of the company is to be situate; 1[***]
2[(c) in the case of a company in existence immediately before the commencement of the Companies (Amendment) Act, 1965, the objects of the company;
(d) in the case of a company formed after such commencement,—
(i) the main objects of the company to be pursued by the company on its incorporation and objects incidental or ancillary to the attainment of the
The memorandum of association of a company shall be in such one of the Forms in Tables B, C, D and E in Schedule I as may applicable to the case of the company, or in a Form as near thereto as circumstances admit.
The memorandum shall—
(a) be printed,
(b) be divided into paragraphs numbered consecutively, and
(c) be signed by each subscriber (who shall add his address, description and occupation, if any,) in the presence of at least one witness who shall attest the signature and shall likewise add his address, description and occupation, if any.
Where, in the memorandum of association of a company in existence immediately before the commencement of the Madras State (Alteration of Name) Act, 1968 (53 of 1968) it is stated that Madras is the State in which the registered office of that company is situate, then, notwithstanding anything contained in this Act, the said memorandum shall, as from such commencement, be deemed to have been altered by substitution of a reference to the State of Tamil Nadu for the reference to the State of Madras, and the Registrar of the State of Tamil Nadu shall make necessary alterations in the memorandum of association and the certificate of incorporation of the said company.]
-----------------------------
1. Ins. by the Madras State (Alteration of Name) (Adaptation of Laws on Union Subjects) Order, 1970 (w.r.e.f. 14-1-1969).
&nb
Where, in the memorandum of association of a company in existence immediately before the commencement of the Mysore State (Alteration of Name) Act, 1973 (31 of 1973), it is stated that Mysore is the State in which the registered office of that company is situate, then notwithstanding anything contained in this Act, the said memorandum shall as from such commencement, be deemed to have been altered by substitution of a reference to the State of Karnataka for the reference to the State of Mysore, and the Registrar of the State of Karnataka shall make necessary alterations in the memorandum of association and the certificate of incorporation of the said company.]
-----------------------------
1. Ins. by the Mysore State (Alteration of Name) (Adaptation of Laws on Union Subjects) Order, 1974 (w.r.e.f. 1-11-1973).
(1) A company shall not alter the conditions contained in its memorandum except in the cases, in the mode, and to the extent for which express provision is made in this Act.
(2) Only those provisions which are required by section 13 or by any other specific provision contained in this Act to be stated in the memorandum of the company concerned shall be deemed to be conditions contained in its memorandum.
(3) Other provisions contained in the memorandum including those relating to the appointment of a managing director 1[***] or manager, may be altered in the same manner as the articles of the company, but if there is any express provision in this Act permitting of the alteration of such provisions in any other manner, they may also be altered in such other manner.
(4) All references to the art
(1) A company may, by special resolution, alter the provisions of its memorandum so as to change the place of its registered office from one State to another, or with respect to the objects of the company so far as may be required to enable it—
(a) to carry on its business more economically or more efficiently; or
(b) to attain its main purpose by new or improved means; or
(c) to enlarge or change the local area of its operations; or
(d) to carry on some business which under existing circumstances may conveniently or advantageously be combined with the business of the company; or
(e) to restrict or abandon any of the objects specified in the memorandum; or
&
1[(1) A company shall file with the Registrar—
(a) a special resolution passed by a company in relation to clauses (a) to (g) of sub-section (1) of section 17, within one month from the date of such resolution; or
(b) a certified copy of the order of the 2[Central Government] made under sub-section (5) of that section confirming the alterations, within three months from the date of order,
as the case may be, together with a printed copy of the memorandum as altered and the Registrar shall register the same and certify the registration under his hand within one month from the date of filing such documents.]
(2) The certificate shall be conclusive evidence that all the requirements of this Act with respect to the alteration and the confirmation
(1) No such alteration as is referred to in section 17 shall have any effect until it has been duly registered in accordance with the provisions of section 18.
1[(2) If the documents, required to be filed with the Registrar under section 18 are not filed within the time allowed under that section, such alteration and the order of the 2[Central Government] made under sub-section (5) of section 17 and all proceedings connected therewith shall, at the expiry of such period, become void and inoperative:
Provided that the 2[Central Government] may, on sufficient cause shown, revive the order on application made within a further period of one month.]
---------------------------------
1. Subs. by Act 65 of 1960, sec. 8, for sub-section (2) (w.e.f. 28-12-
(1) No company shall be registered by a name which, in the opinion of the Central Government, is undesirable.
1[(2) Without prejudice to the generality of the foregoing power, a name which is identical with, or too nearly resembles,—
(i) the name by which a company in existence has been previously registered; or
(ii) a registered trade mark, or a trade mark which is subject of an application for registration, of any other person under the Trade Marks Act, 1999,
may be deemed to be undesirable by the Central Government within the meaning of sub-section (1).
(3) The Central Government may, before deeming a name as undesirable under clause (ii) of sub-section (2), consult the Registrar of Trade Marks.]
A company may, by special resolution and with the approval of the Central Government signified in writing change its name:
1[Provided that no such approval shall be required where the only change in the name of a company is the addition thereto or, as the case may be, the deletion therefrom, of the word “Private”, consequent on the conversion in accordance with the provisions of this Act of a public company into a private company or of a private company into a public company.]
----------------------
1. Added by Act 31 of 1965, sec. 6 (w.e.f. 15-10-1965).
----------------------
1[(1) If, through inadvertence or otherwise, a company on its first registration or on its registration by a new name, is registered by a name which,—
(i) in the opinion of the Central Government, is identical with, or too nearly resembles, the name by which a company in existence has been previously registered, whether under this Act or any previous companies law, the first-mentioned company, or
(ii) on an application by a registered proprietor of a trade mark, is in the opinion of the Central Government identical with, or too nearly resembles, a registered trade mark of such proprietor under the Trade Marks Act, 1999, such company,—]
(a) may, by ordinary resolution and with the previous approval of the Central Government signified in writing, change its name or new name; and
&nbs
(1) Where a company changes its name in pursuance of section 21 or 22, the Registrar shall enter the new name on the register in the place of the former name, and shall issue a fresh certificate of incorporation with the necessary alterations embodied therein; and the change of name shall be complete and effective only on the issue of such a certificate.
(2) The Registrar shall also make the necessary alteration in the memorandum of association of the company.
(3) The change of name shall not affect any rights or obligations of the company, or render defective any legal proceedings by or against it; and any legal proceedings which might have been continued or commenced by or against the company by its former name may be continued by or against the company by its new name.
(1) In the case of a company which was a private limited company immediately before the commencement of this Act, the Registrar shall enter the word ‘Private’ before the word ‘Limited’ in the name of the company upon the register and shall also make the necessary alterations in the certificate of incorporation issued to the company and in its memorandum of association.
(2) Sub-section (3) of section 23 shall apply to a change of name under sub-section (1), as it applies to a change of name under section 21.
(1) Where it is proved to the satisfaction of the Central Government that an association—
(a) is about to be formed as a limited company for promoting commerce, art, science, religion, charity or any other useful object, and
(b) intends to apply its profits, if any, or other income in promoting its objects, and to prohibit the payment of any dividend to its members,
the Central Government may by licence, direct that the association may be registered as a company with limited liability, without the addition to its name of the word “Limited” or the words “Private Limited”.
(2) The association may thereupon be registered accordingly; and on registration shall enjoy all the privileges, and (subject to the provisions of this section) be subject to
There may in the case of a public company limited by shares, and there shall in the case of an unlimited company or a company limited by guarantee or a private company limited by shares, be registered with the memorandum, articles of association signed by the subscribers of the memorandum, prescribing regulations for the company.
(1) In the case of an unlimited company, the articles shall state the number of members with which the company is to be registered and, if the company has a share capital the amount of share capital with which the company is to be registered.
(2) In the case of a company limited by guarantee, the articles shall state the number of members with which the company is to be registered.
(3) In the case of a private company having a share capital, the articles shall contain provisions relating to the matters specified in sub-clauses (a), (b) and (c) of clause (iii) of sub-section (1) of section 3; and in the case of any other private company, the articles shall contain provisions relating to the matters specified in the said sub-clauses (b) and (c).
(1) The articles of association of a company limited by shares may adopt all or any of the regulations contained in Table A in Schedule I.
(2) In the case of any such company which is registered after the commencement of this Act, if articles are not registered, or if articles are registered, insofar as the articles do not exclude or modify the regulations contained in Table A aforesaid, those regulations shall, so far as applicable, be the regulations of the company in the same manner and to the same extent as if they were contained in duly registered articles.
(1) Notwithstanding anything contained in sections 621 and 624, every offence connected with or arising out of acceptance of deposits under section 58A or section 58AA shall be cognizable offence under the Code of Criminal Procedure, 1973.
(2) No Court shall take cognizance of any offence under sub-section (1) except on a complaint made by the Central Government or any officer authorised by it in this behalf.]
-----------------------------
1. Ins. by Act 53 of 2000, sec. 19 (w.e.f. 13-12-2000).
-----------------------------
The articles of association of any company, not being a company limited by shares, shall be in such one of the Forms in Tables C, D and E in Schedule I as may be applicable, or in a Form as near thereto as circumstances admit:
1[Provided that nothing in this section shall be deemed to prevent a company from including any additional matters in its articles in so far as they are not inconsistent with the provisions contained in the Form in any of the Tables C, D and E, adopted by the company.]
------------------------------
1. Ins. by Act 65 of 1960, sec. 10 (w.e.f. 28-12-1960).
------------------------------
Articles shall—
(a) be printed;
(b) be divided into paragraphs numbered consecutively; and
(c) be signed by each subscriber of the memorandum of association (who shall add his address, description and occupation, if any,) in the presence of at least one witness who shall attest the signature and shall likewise add his address, description and occupation, if any.
(1) Subject to the provisions of this Act and to the conditions contained in its memorandum a company may, by special resolution, alter its articles:
1[Provided that no alteration made in the articles under this sub-section which has the effect of converting a public company into a private company, shall have effect unless such alteration has been approved by the Central Government.]
(2) Any alteration so made shall, subject to the provisions of this Act, be as valid as if originally contained in the articles and be subject in like manner to alteration by special resolution.
1[(2A) Where any alteration such as is referred to in the proviso to sub-section (1) has been approved by the Central Government, a printed copy of the articles as altered shall be filed by the company with the Registrar w
(1) Subject to the provisions of this section,—
(a) a company registered as unlimited may register under this Act as a limited company; and
(b) a company already registered as a limited company may re-register under this Act.
(2) On registration in pursuance of this section, the Registrar shall close the former registration of the company, and may dispense with the delivery to him of copies of any documents with copies of which he was furnished on the occasion of the original registration of the company; but, save as aforesaid, the registration shall take place in the same manner and shall have effect, as if it were the first registration of the company under this Act.
(3) The registration of an unlimited company as a limited company under thi
(1) There shall be presented for registration, to the Registrar of the State in which the registered office of the company is stated by the memorandum to be situate—
(a) the memorandum of the company;
(b) its articles, if any; and
1[(c) the agreement, if any, which the company proposes to enter into with any individual for appointment as its managing or whole-time director or manager.]
(2) A declaration by an advocate of the Supreme Court or of a High Court, an attorney or a pleader entitled to appear before a High Court, or 2[a Secretary or a chartered accountant in whole-time practice in India] who is engaged in the formation of a company, or by a person named in the articles as a director 3[***] manager or secretary of the company, that
(1) On the registration of the memorandum of a company, the Registrar shall certify under his hand that the company is incorporated and, in the case of a limited company that the company is limited.
(2) From the date of incorporation mentioned in the certificate of incorporation, such of the subscribers of the memorandum and other persons, as may from time to time be members of the company, shall be a body corporate by the name contained in the memorandum, capable forthwith of exercising all the functions of an incorporated company, and having perpetual succession and a common seal, but with such liability on the part of the members to contribute to the assets of the company in the event of its being wound up as is mentioned in this Act.
A certificate of incorporation given by the Registrar in respect of any association shall be conclusive evidence that all the requirements of this Act have been complied with in respect of registration and matters precedent and incidental thereto, and that the association is a company authorised to be registered and duly registered under this Act.
(1) Subject to the provisions of this Act, the memorandum and articles shall, when registered, bind the company and the members thereof to the same extent as if they respectively had been signed by the company and by each member, and contained covenants on its and his part to observe all the provisions of the memorandum and of the articles.
(2) All money payable by any member to the company under the memorandum or articles shall be a debt due from him to the company.
(1) In the case of a company limited by guarantee and not having a share capital, and registered on or after the first day of April, 1914, every provision in the memorandum or articles or in any resolution of the company purporting to give any person a right to participate in the divisible profits of the company otherwise than as a member shall be void.
(2) For the purpose of the provisions of this Act relating to the memorandum of a company limited by guarantee and of this section, every provision in the memorandum or articles, or in any resolution, of any company limited by guarantee and registered on or after the first day of April, 1914, purporting to divide the undertaking of the company into shares or interests, shall be treated as a provision for a share capital, notwithstanding that the nominal amount or number of the shares or interests is not specified thereby.
Notwithstanding anything in the memorandum or articles of a company, no member of the company shall be bound by an alteration made in the memorandum or articles after the date on which he became a member, if and so far as the alteration requires him to take or subscribe for more shares than the number held by him at the date on which the alteration is made, or in any way increases his liability as at that date, to contribute to the share capital of, or otherwise to pay money to, the company:
1[Provided that this section shall not apply—
(a) in any case where the member agrees in writing either before or after a particular alteration is made, to be bound by the alteration; or
(b) in any case where the company is a club or the company is any other association and the alteration requires th
(1) A company shall, on being so required by a member, send to him within seven days of the requirement and subject to the payment of a fee of one rupee, a copy each of the following documents as in force for the time being—
(a) the memorandum;
(b) the articles, if any;
1[***]
(d) every other agreement and every resolution referred to in section 192, if and insofar as they have not been embodied in the memorandum or articles.
(2) If a company makes default in complying with the requirements of this section, the company, and every officer of the company who is in default, shall be punishable, for each offence, with fine which may extend to 2[five hundred rupees].
&
(1) Where an alteration is made in the memorandum or articles of a company, 1[***] or any resolution, referred to in section 192, every copy of the memorandum, articles, agreement or resolution issued after the date of the alteration shall be in accordance with the alteration.
(2) If, at any time, the company issues any copies of the memorandum, articles, resolution or agreement, which are not in accordance with the alteration or alterations made therein before that time, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to 1[one hundred rupees] for each copy so issued.
-----------------------------------
1. Certain words omitted by Act 53 of 2000, sec. 11 (w.e.f. 13-12-2000).
(1) The subscribers of the memorandum of a company shall be deemed to have agreed to become members of the company, and on its registration, shall be entered as members in its register of members.
(2) Every other person who 1[agrees in writing] to become a member of a company and whose name is entered in its register of members, shall be a member of the company.
2[(3) Every person holding equity share capital of a company and whose name is entered as beneficial owner in the records of the depository shall be deemed to be a member of the concerned company.]
------------------------------
1. Subs. by Act 65 of 1960, sec. 13, for “agrees” (w.e.f. 28-12-1960).
2. Ins. by Act 22 of 1996, sec. 30
(1) Except in the cases mentioned in this section, a body corporate cannot be a member of a company which is its holding company and any allotment or transfer of shares in a company to its subsidiary shall be void.
(2) Nothing in this section shall apply—
(a) where the subsidiary is concerned as the legal representative of a deceased member of the holding company; or
(b) where the subsidiary is concerned as trustee, unless the holding company or a subsidiary thereof is beneficially interested under the trust and is not so interested only by way of security for the purposes of a transaction entered into by it in the ordinary course of a business which includes the lending of money.
(3) This section shall not prevent a subsidiary from continuing
Where the articles of a company include the provisions which, under clause (iii) of sub-section (1) of section 3, are required to be included in the articles of a company in order to constitute it a private company, but default is made in complying with any of those provisions, the company shall cease to be entitled to the privileges and exemptions conferred on private companies by or under this Act, and this Act shall apply to the company as if it were not a private company:
Provided that the 1[Central Government] on being satisfied that the failure to comply with the conditions was accidental or due to inadvertence or to some other sufficient cause, or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any other person interested and on such terms and conditions as seem to the 1[Central Government] just and expedient, order t
(1) Save as otherwise provided in this section, where not less than twenty-five per cent of the paid-up share capital of a private company having a share capital, is held by one or more bodies corporate, the private company shall,—
(a) on and from the date on which the aforesaid percentage is first held by such body or bodies corporate, or
(b) where the aforesaid percentage has been first so held before the commencement of the Companies (Amendment) Act, 1960 (65 of 1960), on and from the expiry of the period of three months from the date of such commencement unless within that period the aforesaid percentage is reduced below twenty-five per cent of the paid-up share capital of the private company,
become by virtue of this section a public company:
&
(1) If a company, being a private company, alters its articles in such a manner that they no longer include the provisions which, under clause (iii) of sub-section (1) of section 3, are required to be included in the articles of a company in order to constitute it a private company, the company—
(a) shall, as on the date of the alteration, cease to be a private company; and
(b) shall, within a period of 1[thirty] days after the said date, file with the Registrar either a prospectus or a statement in lieu of prospectus, as specified in sub-section (2).
(2) (a) Every prospectus filed under sub-section (1) shall state the matters specified in Part I of Schedule II and set out the reports specified in Part II of that Schedule, and the said Parts I and II shall have effect subject to the pro
If at any time the number of members of a company is reduced in the case of a public company, below seven, or in the case of a private company, below two, and the company carries on business for more than six months while the number is so reduced, every person who is a member of the company during the time that it so carries on business after those six months and is cognizant of the fact that it is carrying on business with fewer than seven members or two members, as the case may be, shall be severally liable for the payment of the whole debts of the company contracted during that time, and may be severally sued therefor.
(1) Contracts on behalf of a company may be made as follows:—
(a) a contract which, if made between private persons, would by law be required to be in writing signed by the parties to be charged therewith, may be made on behalf of the company in writing signed by any person acting under its authority, express or implied, and may in the same manner be varied or discharged;
(b) a contract which, if made between private persons, would by law be valid although made by parole only and not reduced into writing, may be made by parole on behalf of the company by any person acting under its authority, express or implied, and may in the same manner be varied or discharged.
(2) A contract made according to this section shall bind the company.
A bill of exchange, hundi or promissory note shall be deemed to have been made, accepted, drawn or endorsed on behalf of a company if drawn, accepted, made, or endorsed in the name of, or on behalf or on account of, the company by any person acting under its authority, express or implied.
(1) A company may, by writing under its common seal, empower any person, either generally or in respect of any specified matters, as its attorney, to execute deeds on its behalf in any place either in or outside India.
(2) A deed signed by such an attorney on behalf of the company and under his seal where sealing is required, shall bind the company and have the same effect as if it were under its common seal.
(1) Save as otherwise provided in sub-sections (2) to (5) 1[or any other law for the time being in force] and subject to the provisions of sub-sections (6) to (8),—
(a) all investments made by a company on its own behalf shall be made and held by it in its own name; and
(b) where any such investments are not so held at the commencement of this Act the company shall, within a period of one year from such commencement, either cause them to be transferred to, and hold them in, its own name, or dispose of them.
(2) Where the company has a right to appoint any person or persons, or where any nominee or nominees of the company has or have been appointed, as a director or directors of any other body corporate, shares in such other body corporate to an amount not exceeding the nominal value of t
(1) A company whose objects require or comprise the transaction of business outside India may, if authorised by its articles, have for use in any territory, district or place not situate in India an official seal which shall be a facsimile of the common seal of the company, with the addition on its face of the name of the territory, district or place where it is to be used.
(2) A company having an official seal for use in any such territory, district or place may, by writing under its common seal, authorise any person appointed for the purpose in that territory, district or place to affix the official seal to any deed or other document to which the company is a party in that territory, district or place.
(3) The authority of any agent authorised under sub-section (2) shall, as between the company and any person dealing with the agent, co
A document may be served on a company or an officer thereof by sending it to the company or officer at the registered office of the company by post under a certificate of posting or by registered post, or by leaving it at its registered office:
1[Provided that where the securities are held in a depository. The records of the beneficial ownership may be served by such depository on the company by means of electronic mode or by delivery of floppies or discs.]
--------------------------------
1. Ins. by Act 22 of 1996, sec. 30 and Sch. (w.r.e.f. 20-9-1995).
--------------------------------
A document may be served on a Registrar by sending it to him at his office by post under a certificate of posting or by registered post, or by delivering it to, or leaving it for, him at his office.
(1) A document may be served by a company on any member thereof either personally, or by sending it by post to him to his registered address, or if he has no registered address in India, to the address, if any, within India supplied by him to the company for the giving of notices to him.
(2) Where a document is sent by post,—
(a) service thereof shall be deemed to be effected by properly addressing, prepaying and posting a letter containing the document, provided that where a member has intimated to the company in advance that documents should be sent to him under a certificate of posting or by registered post with or without acknowledgment due and has deposited with the company a sum sufficient to defray the expenses of doing so, service of the document shall not be deemed to be effected unless it is sent in the manner intimated by t
Save as otherwise expressly provided in this Act, a document or proceeding requiring authentication by a company may be signed by a director, 1[***] the manager, the secretary or other authorised officer of the company, and need not be under its common seal.
-------------------------------
1. The words “the managing agent, the secretaries and treasurers, ” omitted by Act 53 of 2000, sec. 15 (w.e.f. 13-12-2000).
-------------------------------
A prospectus issued by or on behalf of a company or in relation to an intended company shall be dated, and that date shall, unless the contrary is proved, be taken as the date of publication of the prospectus.
(1) Every prospectus issued—
(a) by or on behalf of a company, or
(b) by or on behalf of any person who is or has been engaged or interested in the formation of a company,
shall state the matters specified in Part I of Schedule II and set out the reports specified in Part II of that Schedule; and the said Parts I and II shall have effect subject to the provisions contained in Part III of that Schedule.
(2) A condition requiring or binding an applicant for shares in or debentures of a company to waive compliance with any of the requirements of this section, or purporting to affect him with notice for any contract, document or matter not specifically referred to in the prospectus, shall be void.
(3) No
A prospectus inviting persons to subscribe for shares in or debentures of a company shall not include a statement purporting to be made by an expert, unless the expert is a person who is not, and has not been, engaged or interested in the formation or promotion, or in the management, of the company.
A prospectus inviting persons to subscribe for shares in or debentures of a company and including a statement purporting to be made by an expert shall not be issued unless—
(a) he has given his written consent to the issue thereof with the statement included in the form and context in which it is included, and has not withdrawn such consent before the delivery of a copy of the prospectus for registration; and
(b) a statement that he has given and has not withdrawn his consent as aforesaid appears in the prospectus.
(1) The Central Government may, in consultation with the Reserve Bank of India, prescribe the limits up to which, the manner in which and the conditions subject to which deposits may be invited or accepted by a company either from the public or from its members.
(2) No company shall invite, of allow any other person to invite or cause to be invited on its behalf, any deposit unless—
(a) such deposit is invited or is caused to be invited in accordance with the rules made under sub-section (1), 2[***]
(b) an advertisement, including therein a statement showing the financial position of the company, has been issued by the company in such form and in such manner as may be 3[prescribed, and]
4[(c) the company is not in default in the payment of
(1) Every company, which accepts deposits from small depositors, shall intimate to the 2[Tribunal] any default made by it in repayment of any deposits or part thereof or any interest thereupon.
(2) The intimation under sub-section (1) shall,--
(a) be given within sixty days from the date of default;
(b) include particulars in respect of the names and addresses of each small depositor, the principal sum of deposits due to them and interest accrued thereupon.
Explanation.—For removal of doubts, it is hereby declared that the intimation under this section shall be given on monthly basis.
(3) Where a company has made a default in repayment of any deposit or part thereof or any interest thereupon to a sm
1[58AAA. Default in acceptance or refund of deposits to be cognizable
(1) Notwithstanding anything contained in sections 621 and 624, every offence connected with or arising out of acceptance of deposits under section 58A or section 58AA shall be cognizable offence under the Code of Criminal Procedure, 1973.
(2) No court shall take cognizance of any offence under sub-section (1) except on a complaint made by the Central Government or any officer authorised by it in this behalf.]
_____________________
1. Inserted by Act 53 of 2000, Section 19, (w.e.f. 13-12-2000).
The provisions of this Act relating to a prospectus shall, so far as may be, apply to an advertisement referred to in section 58A.]
-----------------------------
1. Ins. by Act 41 of 1974, sec. 7 (w.e.f. 1-2-1975).
-----------------------------
(1) If any prospectus is issued in contravention of section 57 or 58, the company, and every person, who is knowingly a party to the issue, thereof, shall be punishable with fine which may extend to 1[fifty thousand rupees].
(2) In sections 57 and 58, the expression “expert” includes an engineer, a valuer, an accountant and any other person whose profession gives authority to a statement made by him.
-----------------------------
1. Subs. by Act 53 of 2000, sec. 20, for “five thousand rupees” (w.e.f. 13-12-2000).
-----------------------------
(1) No prospectus shall be issued by or on behalf of a company or in relation to an intended company unless, on or before the date of its publication, there has been delivered to the Registrar for registration a copy thereof signed by every person who is named therein as a director or proposed director of the company or by his agent authorised in writing and having endorsed thereon or attached thereto—
(a) any consent to the issue of the prospectus required by section 58 from any person as an expert; and
(b) in the case of a prospectus issued generally also—
(i) a copy of every contract required by clause 16 of Schedule II to be specified in the prospectus, or, in the case of a contract not reduced into writing, a memorandum giving full particulars thereof; and
&n
(1) Any public financial institution, public sector bank or scheduled bank whose main object is financing shall file a shelf prospectus.
(2) A company filing a shelf prospectus with the Registrar shall not be required to file prospectus afresh at every stage of offer of securities by it within a period of validity of such shelf prospectus.
(3) A company filing a shelf prospectus shall be required to file an information memorandum on all material facts relating to new charges created, changes in the financial position as have occurred between the first offer of securities, previous offer of securities and the succeeding offer of securities within such time as may be prescribed by the Central Government, prior to making of a second or subsequent offer of securities under the shelf prospectus.
(4
(1) A public company making an issue of securities may circulate information memorandum to the public prior to filing of a prospectus.
(2) A company inviting subscription by an information memorandum shall be bound to file a prospectus prior to the opening of the subscription lists and the offer as a red-herring prospectus, at least three days before the opening of the offer.
(3) The information memorandum and red-herring prospectus shall carry same obligations as are applicable in the case of a prospectus.
(4) Any variation between the information memorandum and the red-herring prospectus shall be highlighted as variations by the issuing company.
Explanation.—For the purposes of sub-sections (2), (3) and (4), “red-herring prospectus” means a prospe
A company shall not, at any time, vary the terms of a contract referred to in the prospectus or statement in lieu of prospectus, except subject to the approval of, or except on authority given by, the company in general meeting.
(1) Subject to the provisions of this section, where a prospectus invites persons to subscribe for shares in or debentures of a company, the following persons shall be liable to pay compensation to every person who subscribes for any shares or debentures on the faith of the prospectus for any loss or damage he may have sustained by reason of any untrue statement included therein, that is to say,—
(a) every person who is a director of the company at the time of the issue of the prospectus;
(b) every person who has authorised himself to be named and is named in the prospectus either as a director, or as having agreed to become a director, either immediately or after an interval of time;
(c) every person who is a promoter of the company; and
(
(1) Where a prospectus issued after the commencement of this Act includes any untrue statement, every person who authorised the issue of the prospectus shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to 1[fifty thousand rupees], or with both, unless he proves either that the statement was immaterial or that he had reasonable ground to believe, and did up to the time of the issue of the prospectus believe, that the statement was true.
(2) A person shall not be deemed for the purposes of this section to have authorised the issue of a prospectus by reason only of his having given—
(a) the consent required by section 58 to the inclusion therein of a statement purporting to be made by him as an expert, or
(1) Where a company allots or agrees to allot any shares in or debentures of the company with a view to all or any of those shares or debentures being offered for sale to the public, any document by which the offer for sale to the public is made shall, for all purposes, be deemed to be a prospectus issued by the company; and all enactments and rules of law as to the contents of prospectus and as to liability in respect of statements in and omissions from prospectuses, or otherwise relating to prospectuses, shall apply with the modifications specified in sub-sections (3), (4) and (5), and have effect accordingly, as if the shares or debentures had been offered to the public for subscription and as if persons accepting the offer in respect of any shares or debentures were subscribers for those shares or debentures, but without prejudice to the liability, if any, of the persons by whom the offer is made in respect of mis-stateme
(1) For the purposes of the foregoing provisions of this Part—
(a) a statement included in a prospectus shall be deemed to be untrue, if the statement is misleading in the form and context in which it is included; and
(b) where the omission from a prospectus of any matter is calculated to mislead the prospectus shall be deemed, in respect of such omission, to be a prospectus in which an untrue statement is included.
(2) For the purposes of sections 61, 62 and 63 and clause (a) of sub-section (1) of this section, the expression “included” when used with reference to a prospectus, means included in the prospectus itself or contained in any report or memorandum appearing on the face thereof or by reference incorporated therein or issued therewith.
Where any prospectus is published as a newspaper advertisement, it shall not be necessary in the advertisement to specify the contents of the memorandum or the signatories thereto, or the number of shares subscribed for by them.
(1) Any reference in this Act or in the articles of a company to offering shares or debentures to the public shall, subject to any provision to the contrary contained in this Act and subject also to the provisions of sub-sections (3) and (4), be construed as including a reference to offering them to any section of the public, whether selected as members or debenture-holders of the company concerned or as clients of the person issuing the prospectus or in any other manner.
(2) Any reference in this Act or in the articles of a company to invitations to the public to subscribe for shares or debentures shall, subject as aforesaid, be construed as including a reference to invitations to subscribe for them extended to any section of the public, whether selected as members or debenture-holders of the company concerned or as clients of the person issuing the prospectus or in any other mann
Any person who either by knowingly or recklessly making any statement, promise or forecast which is false, deceptive or misleading or by any dishonest concealment of material facts, induces or attempts to induce another person to enter into, or to offer to enter into—
(a) any agreement for or with a view to acquiring, disposing of, subscribing for, or underwriting shares or debentures; or
(b) any agreement the purpose or pretended purpose of which is to secure a profit to any of the parties from the yield of shares or debentures, or by reference to fluctuations in the value of shares or debentures,
shall be punishable with imprisonment for a term which may extend to five years, or with fine which may extend to 1[one lakh rupees], or with both.
(1) Any person who—
(a) makes in a fictitious name an application to a company for acquiring, or subscribing for, any shares therein, or
(b) otherwise induces a company to allot, or register any transfer of, shares therein to him, or any other person in a fictitious name,
shall be punishable with imprisonment for a term which may extend to five years.
(2) The provisions of sub-section (1) shall be prominently reproduced in every prospectus issued by the company and in every form of application for shares which is issued by the company to any person.]
-------------------------------
1. Ins. by Act 31 of 1965, sec. 8 (w.e.f. 15-10-1965).
&nb
Nothwithstanding anything contained in any other provisions of this Act, every listed public company, making initial public offer of any security for a sum of rupees ten crores or more, shall issue the same only in dematerialised form by complying with the requisite provisions of the Depositories Act, 1996 (22 of 1996) and the regulations made thereunder.]
-------------------------------
1. Ins. by Act 53 of 2000, sec. 26 (w.e.f. 13-12-2000).
-------------------------------
(1) No allotment shall be made of any share capital of a company offered to the public for subscription, unless the amount stated in the prospectus as the minimum amount which, in the opinion of the Board of directors, must be raised by the issue of share capital in order to provide for the matters specified in clause 5 of Schedule II has been subscribed, and the sum payable on application for the amount so stated has been paid to and received by the company, whether in case or by a cheque or other instrument which has been paid.
(2) The amount so stated in the prospectus shall be reckoned exclusively of any amount payable otherwise than in money, and is in this Act referred to as “the minimum subscription”.
(3) The amount payable on application on each share shall not be less than five per cent of the nominal amount of the share.
&nb
(1) A company having a share capital, which does not issue a prospectus on or with reference to its formation, or which has issued such a prospectus but has not proceeded to allot any of the shares offered to the public for subscription, shall not allot any of its shares or debentures unless at least three days before the first allotment of either shares or debentures, there has been delivered to the Registrar for registration a statement in lieu of prospectus signed by every person who is named therein as a director or proposed director of the company or by his agent authorised in writing in the form and containing the particulars set out in Part I of Schedule III and, in the cases mentioned in Part II of that Schedule setting out the reports specified therein, and the said Parts I and II shall have effect subject to the provisions contained in Part III of that Schedule.
(2) Every
(1) An allotment made by a company to an applicant in contravention of the provisions of section 69 or 70 shall be voidable at the instance of the applicant—
(a) within two months after the holding of the statutory meeting of the company, and not later, or
(b) in any case where the company is not required to hold a statutory meeting or where the allotment is made after the holding of the statutory meeting, within two months after the date of the allotment, and not later.
(2) The allotment shall be voidable as aforesaid, notwithstanding that the company is in course of being wound up.
(3) If any director of a company knowingly contravenes, or wilfully authorises or permits the contravention of, any of the provisions of section 69 or 70 with res
(1) (a) No allotment shall be made of any shares in or debentures of a company in pursuance of a prospectus issued generally, and no proceedings shall be taken on applications made in pursuance of a prospectus so issued, until the beginning of the fifth day after that on which the prospectus is first so issued or such later time, if any, as may be specified in the prospectus:
Provided that where, after a prospectus is first issued generally, a public notice is given by some person responsible under section 62 for the prospectus which has the effect of excluding, limiting or diminishing his responsibility, no allotment shall be made until the beginning of the firth day after that on which such public notice is first given.
(b) Nothing in the foregoing proviso shall be deemed to exclude, limit or diminish any liability that might be incur
1[(1) Every company intending to offer shares or debentures to the public for subscription by the issue of a prospectus shall, before such issue, make an application to one or more recognised stock exchange for permission for the shares or debentures intending to be so offered to be dealt with in the stock exchange or each such stock exchange.]
2[3[(1A)] Where a prospectus, whether issued generally or not, states that an 4[application under sub-section (1) has been] made for permission for the shares or debentures offered thereby to be dealt in one or more recognized stock exchanges, such prospectus shall state the names of the stock exchange or, as the case may be, each such stock exchange, and any allotment made on an application in pursuance of such prospectus shall, whenever made, be void 5[***] if the permission has not been granted by the stock exchange or each such stock exc
In reckoning for the purposes of sections 72 and 73 the fifth day, 1[or the eighth day] after another day, any intervening day which is a public holiday under the Negotiable Instruments Act, 1881 (56 of 1981), shall be disregarded, and if the fifth 1[or eighth day] (as so reckoned) is itself such a public holiday there shall for the said purposes be substituted the first day thereafter which is not such other day.
-------------------------------------
1. Subs. by Act 31 of 1988, sec. 11, for “the eighth day, or the tenth day” (w.e.f. 15-6-1988).
-------------------------------------
(1) Whenever a company having a share capital makes any allotment of its shares, the company shall, within 1[thirty days] thereafter,—
(a) file with the Registrar a return of the allotments, stating the number and nominal amount of the shares comprised in the allotment, the names, addresses and occupations of the allotees, and the amount, if any, paid or due and payable on each share:
2[Provided that the company shall not show in such return any shares as having been allotted for cash if cash has not actually been received in respect of such allotment;]
(b) in the case of shares (not being bonus shares) allotted as fully or partly paid up otherwise than in cash, produce for the inspection and examination of the Registrar a contract in writing constituting the title of the allottee
(1) A company may pay a commission to any person in consideration of—
(a) his subscribing or agreeing to subscribe, whether absolutely or conditionally for any shares in, or debentures of the company, or
(b) his procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares in, or debentures of, the company,
if the following conditions are fulfilled, namely:—
(i) the payment of the commission is authorised by the articles;
(ii) the commission paid or agreed to be paid does not exceed in the case of shares, five per cent of the price at which the shares are issued or the amount or rate authorised by the articles, whichever is less, and in the case of debentures
(1) No company limited by shares, and no company limited by guarantee and having a share capital, shall have power to buy its own shares, unless the consequent reduction of capital is effected and sanctioned in pursuance of sections 100 to 104 or of section 402.
(2) No public company, and no private company which is a subsidiary of a public company, shall give, whether directly or indirectly, and whether by means of a loan, guarantee, the provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of or for any shares in the company or in its holding company:
Provided that nothing in this sub-section shall be taken to prohibit—
(a) the lending of money by a banking company in the ordinary c
(1) Notwithstanding anything contained in this Act, but subject to the provisions of sub-section (2) of this section and section 77B, a company may purchase its own shares or other specified securities (hereinafter referred to as “buy-back”) out of—
(i) its free reserves; or
(ii) the securities premium account; or
(iii) the proceeds of any shares or other specified securities:
Provided that no buy-back of any kind of shares or other specified securities shall be made out of the proceeds of an earlier issue of the same kind of shares or same kind of other specified securities.
(2) No company shall purchase its own shares or other specified securities under sub-section (1), unless—
&
Where a company purchases its own shares out of free reserves, then a sum equal to the nominal value of the share so purchased shall be transferred to the capital redemption reserve account referred to in clause (d) of the proviso to sub-section (1) of section 80 and details of such transfer shall be disclosed in the balance sheet.]
----------------------------
1. Ins. by Act 21 of 1999, sec. 4 (w.r.e.f. 31-10-1998).
(1) No company shall directly or indirectly purchase its own shares or other specified securities—
(a) through any subsidiary company including its own subsidiary companies; or
(b) through any investment company or group of investment companies; or
(c) if a default, by the company, in repayment of deposit or interest payable thereon, redemption of debentures or preference shares or payment of dividend to any shareholder or repayment of any term loan or interest payable thereon to any financial institution or bank, is subsisting.
(2) No company shall directly or indirectly purchase its own shares or other specified securities in case such company has not complied with the provisions of sections 159, 207 and 211.]
&
(1) Where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to an account, to be called “the 1[securities] premium account”; and the provisions of this Act relating to the reduction of the 1[securities] capital of a company shall, except as provided in this section apply as if the 1[securities] premium account were paid-up 1[securities] capital of the company.
(2) The 1[securities] premium account may, notwithstanding anything in sub-section (1), be applied by the company—
(a) in paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares;
(b) in writing off the preliminary expenses of the company;
&
(1) A company shall not issue shares at a discount except as provided in this section.
(2) A company may issue at a discount shares in the company of a class already issued, if the following conditions are fulfilled, namely:—
(i) the issue of the shares at a discount is authorised by a resolution passed by the company in general meeting, and sanctioned by the 1[Central Government];
(ii) the resolution specifies the maximum rate of discount 2[***] at which the shares are to be issued:
3[Provided that no such resolution shall be sanctioned by the 4[Central Government] if the maximum rate of discount specified in the resolution exceeds ten per cent, 5[unless Central Government is of opinion] that a higher percentage of discount may be allowed in
—(1) Notwithstanding anything contained in section 79, a company may issue sweat equity shares of a class of shares already issued if the following conditions are fulfilled, namely:—
(a) the issue of sweat equity shares is authorised by a special resolution passed by the company in the general meeting;
(b) the resolution specifies the number of shares, current market price, consideration, if any, and the class or classes of directors or employees to whom such equity shares are to be issued;
(c) not less than one year has, at the date of the issue, elapsed since the date on which the company was entitled to commence business;
(d) the sweat equity shares of a company, whose equity shares are listed on a recognised stock exchange, are issue
(1) Subject to the provisions of this section, a company limited by shares may, if so authorised by its articles, issue preference shares which are, or at the option of the company are to be liable, to be redeemed:
Provided that—
(a) no such shares shall be redeemed except out of profits of the company which would otherwise be available for dividend or out of the proceeds of a fresh issue of shares made for the purposes of the redemption;
(b) no such shares shall be redeemed unless they are fully paid;
(c) the premium, if any payable on redemption shall have been provided for out of the profits of the company or out of the company‘s 2 [security premium account], before the shares are redeemed;
(d) wh
Section 80 of the Companies Act, 1956 governs the issuance and redemption of redeemable preference shares by companies. This section outlines the conditions under which such shares can be redeemed, ensuring that the interests of both the company and its shareholders are protected.
Section 80 provides that a company may issue redeemable preference shares, which can be redeemed only under specific conditions:- Redemption must occur out of profits available for dividends or from the proceeds of a fresh issue of shares made for the purpose of redemption.- The shares must be fully paid before redemption.- Any premium payable on redemption must be provided for out of profits or the share premium account.- A capital redemption reserve account must be created for shares redeemed out of profits.
The scope of Section 80 is limited to the redemption of preference shares and does not extend to other types of shares or financial instruments. It ensures that the redemption process is conducted in a manner that does not adversely affect the company's financial stability.
While Section 80 itself does not prescribe specific penalties, non-compliance with its provisions may lead to consequences under other sections of the Companies Act, such as penalties for unauthorized redemption or misrepresentation of financial statements.
This commentary provides a comprehensive overview of Section 80 of the Companies Act, 1956, highlighting its significance in corporate governance and shareholder rights.
(1) Notwithstanding anything contained in the terms of issue of any preference shares, every preference share issued before the commencement of the Companies (Amendment) Act, 1988,—
(a) which is irredeemable, shall be redeemed by the company within a period not exceeding five years from such commencement, or
(b) which is not redeemable before the expiry of ten years from the sate of issue thereon in accordance with the terms of its issue and which had not been redeemed before such commencement, shall be redeemed by the company on the date on which such share is due for redemption or within a period not exceeding ten years from such commencement, whichever is earlier:
Provided that where a company is not in a position to redeem any such share within the period aforesaid and to pay the div
(1) 1[Where at any time after the expiry of two years from the formation of a company or at any time after the expiry of one year from the allotment of shares in that company made for the first time after its formation, whichever is earlier, it is proposed to increase the subscribed capital of the company by allotment of further shares, then,—]
(a) such 2[further] shares shall be offered to the persons who, at the date of the offer, are holders of the equity shares of the company, in proportion, as nearly as circumstances admit, to the capital paid up on those shares at that date;
(b) the offer aforesaid shall be made by notice specifying the number of shares offered and limiting a time not being less than fifteen days from the date of the offer within which the offer, if not accepted, will be deemed to have been declined;
The 1[shares or debentures] other interest of any member in a company shall be movable property, transferable in the manner provided by the articles of the company.
---------------------------------
1. Subs. by Act 21 of 1999, sec. 8, for “shares” (w.r.e.f. 31-10-1988).
---------------------------------
Each share in a company having a share capital shall be distinguished by its appropriate number.]
---------------------------------
1. Ins. by Act 8 of 1997, sec. 9 (w.r.e.f. 15-1-1997). Earlier section 83 was omitted by Act 22 of 1996, sec. 30 and Sch. (w.r.e.f. 20-9-1995).
---------------------------------
1[(1)] A certificate, under the common seal of the company, specifying any shares held by any member, shall be prima facie evidence of the title of the member to such shares.
2[(2) A certificate may be renewed or a duplicate of a certificate may be issued if such certificate—
(a) is proved to have been lost or destroyed, or
(b) having been defected or mutilated or torn is surrendered to the company.
(3) If a company with intent to defraud renews a certificate or issues a duplicate thereof, the company shall be punishable with fine which may extend to ten thousand 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 may extend to 3[one lakh
(1) “Preference share capital” means, with reference to any company limited by shares, whether formed before or after the commencement of this Act, that part of the share capital of the company which fulfils both the following requirements, namely:—
(a) that as respects dividends, it carries or will carry a preferential right to be paid a fixed amount or an amount calculated at a fixed rate, which may be either free of or subject to income-tax; and
(b) that as respects capital, it carries or will carry, on a winding up or repayment of capital, a preferential right to be repaid the amount of the capital paid up or deemed to have been paid up, whether or not there is a preferential right to the payment of either or both of the following amounts, namely:—
(i) any money remaining unpaid,
The share capital of a company limited by shares shall be of two kinds only, namely:—
(a) equity share capital—
(i) with voting rights; or
(ii) with differential rights as to dividend, voting or otherwise in accordance with such rules and subject to such conditions as may be prescribed;
(b) preference share capital.]
------------------------------
1. Subs. by Act 53 of 2000, sec. 38, for section 86 (w.e.f. 13-12-2000).
------------------------------
(1) Subject to the provisions of section 89 and sub-section (2) of section 92—
(a) every member of a company limited by shares and holding any equity share capital therein shall have a right to vote, in respect of such capital, on every resolution placed before the company; and
(b) his voting right on a poll shall be in proportion to his share of the paid up equity capital of the company.
(2) (a) Subject as aforesaid and save as provided in clause (b) of this sub-section, every member of a company limited by shares and holding any preference share capital therein shall, in respect of such capital, have a right to vote only on resolutions placed before the company which directly affect the rights attached to his preference shares.
Explanation.—
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 39 (w.e.f. 13-12-2000)].
(1) If at the commencement of this Act any shares, by whatever name called, of any existing company limited by shares carry voting rights in excess of the voting rights attaching under sub-section (1) of section 87 to equity shares in respect of which the same amount of capital has been paid up, the company shall, within a period of one year from the commencement of this Act, reduce the voting rights in respect of the shares first mentioned so as to bring them into conformity with the voting rights attached to such equity shares under sub-section (1) of section 87.
(2) Before the voting rights are brought into such conformity, the holders of the shares in question shall not exercise in respect thereof voting rights in excess of what would have been exercisable by them if the capital paid up on their shares had been equity share capital, in respect of the following resolutions place
(1) Nothing in sections 85, 86, 88 and 89 shall, in the case of any shares issued by a public company before the commencement of this Act, affect any voting rights attached to the shares save an otherwise provided in section 89, or any rights attached to the shares as to dividend, capital or otherwise.
(2) Nothing in sections 85 to 89 shall apply to a private company, unless it is a subsidiary of a public company.
(3) For the removal of doubts, it is hereby declared that on and from the commencement of the Companies (Amendment) Act, 1974, the provisions of section 87 shall apply in relation to the voting rights attached to preference shares issued by a public company before the 1st day of April, 1956, as they apply to the preference shares issued by a public company after that date.
Explanatio
Where after the commencement of this Act, any calls for further share capital are made on shares, such calls shall be made on a uniform basis on all shares falling under the same class.
Explanation.—For the purposes of this section, shares of the same nominal value on which different amounts have been paid up shall not be deemed to fall under the same class.
(1) A company may, if so authorised by its articles accept from any member the whole or a part of the amount remaining unpaid on any shares held by him, although no part of that amount has been called up.
(2) The member shall not however be entitled, where the company is one limited by shares, to any voting rights in respect of the moneys so paid by him until the same would, but for such payment, become presently payable.
A company may, if so authorised by its articles, pay dividends in proportion to the amount paid-up on each share where a larger amount is paid up on some shares than on others.
(1) A limited company having a share capital, may, if so authorised by its articles, after the conditions of its memorandum as follows, that is to say, it may—
(a) increase its share capital by such amount as it thinks expedient by issuing new shares;
(b) consolidate and divide all or any of its share capital into shares of larger amount than its existing shares;
(c) convert all or any of its fully paid up shares into stock, and re-convert that stock into fully paid up shares of any denomination;
(d) sub-divide its shares, or any of them, into shares of smaller amount than is fixed by the memorandum, so however, that in the sub-division the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be
(1) Notwithstanding anything contained in this Act, where the Central Government has, by an order made under sub-section (4) of section 81, directed that any debenture or loan or any part thereof shall be converted into shares in a company, the conditions contained in the memorandum of such company shall, where such order has the effect of increasing the nominal share capital of the company, stand altered and the nominal share capital of such company shall stand increased by an amount equal to the amount of the value of the shares into which such debentures or loans or part thereof has been converted.
(2) Where, in pursuance of an option attached to debentures issued or loans raised by the company, any public financial institution proposes to convert such debentures or loans into shares in the company, the Central Government may, on the application of such public financial institut
(1) If a company having a share capital has—
(a) consolidated and divided its share capital into shares of larger amount than its existing shares;
(b) converted any shares into stock;
(c) re-converted any stock into shares;
(d) sub-divided its shares or any of them;
(e) redeemed any redeemable preference shares; or
(f) cancelled any shares, otherwise than in connection with a reduction of share capital under sections 100 to 104;
the company shall within 1[thirty days] after doing so, give notice thereof to the Registrar specifying, as the case may be, the shares, consolidated, divided, converted, su
Where a company having a share capital has converted any of its shares into stock, and given notice of the conversion to the Registrar, all the provisions of this Act which are applicable to shares only, shall cease to reply as to so much of the share capital as is converted into stock.
(1) Where a company having a share capital, whether its shares have or have not been converted into stock, has increased its share capital beyond the authorised capital, and where a company, not being a company limited by shares, has increased the number of its members beyond the registered number, it shall file with the Registrar, notice of the increase of capital or of members within 1[thirty] days after the passing of the resolution authorising the increase; and the Registrar shall record the increase and also make any alterations which may be necessary in the company’s memorandum or articles or both.
(2) The notice to be given as aforesaid shall include particulars of the classes of shares affected and the conditions, if any, subject to which the new shares have been or are to be issued.
(3) If default is made in complying with this
An unlimited company having a share capital may, by its resolution for registration as a limited company in pursuance of this Act, do either or both of the following things, namely:—
(a) increase the nominal amount of its share capital by increasing the nominal amount of each of its shares but subject to the condition that no part of the increased capital shall be capable of being called up except in the event and for the purposes of the company being wound up;
(b) provide that a specified portion of its uncalled share capital shall not be capable of being called up except in the event and for the purposes of the company being wound up.
A limited company may, by special resolution, determine that any portion of its share capital which has not been already called up shall not be capable of being called up, except in the event and for the purposes of the company being wound up, and thereupon that portion of its share capital shall not be capable of being called up except in that event and for those purposes.
(1) Subject to confirmation by the 1[Tribunal], a company limited by shares or a company limited by guarantee and having a share capital, may, if so authorised by its articles, by especial resolution, reduce its share capital in any way; and in particular and without prejudice to the generality of the foregoing power, may—
(a) extinguish or reduce the liability on any of its shares in respect of share capital not paid up;
(b) either with or without extinguishing or reducing liability on any of its shares cancel any paid-up share capital which is lost, or unrepresented by available assets; or
(c) either with or without extinguishing or reducing liability on any of its shares, pay off any paid-up share capital which is in excess of the wants of the company,
&n
(1) Where a company has passed a resolution for reducing share capital, it may apply, by petition, to the 1[Tribunal] for an order confirming, the reduction.
(2) Where the proposed reduction of share capital involves either the diminution of liability in respect of unpaid share capital or the payment to any shareholder of any paid-up share capital, and in any other case if the 1[Tribunal] so directs, the following provisions shall have effect, subject to the provisions of sub-section (3):—
(a) every creditor of the company who at the date fixed by the 1[Tribunal] is entitled to any debt or claim which, if that date were the commencement of the winding up of the company, would be admissible in proof against the company, shall be entitled to object to the reduction;
(b) the 1[Tribunal] sha
The 1[Tribunal], if satisfied with respect to every creditor of the company who under section 101 is entitled to object to the reduction, that either his consent to the reduction has been obtained or his debt or claim has been discharged, or has determined, or has been secured, may make an order confirming the reduction on such terms and conditions as it thinks fit.
(2) Where the 1[Tribunal] makes any such order, it may—
(a) if for any special reason it thinks proper so to do, make an order directing that the company shall, during such period commencing on, or at any time after, the date of the order, as is specified in the order, add to its name as the last words thereof the words “and reduced”; and
(b) make an order requiring the company to publish as the 1[Tribunal] directs the reason
(1) The Registrar—
(a) on production to him of an order of the 1[Tribunal] confirming the reduction of the share capital of a company; and
(b) on the delivery to him of a certified copy of the order and of a minute approved by the 1[Tribunal] showing, with respect to the share capital of the company as altered by the order, (i) the amount of the share capital, (ii) the number of shares into which it is to be divided, (iii) the amount of each share, and (iv) the amount, if any, at the date of the registration deemed to be paid-up on each share,
shall register the order and minute.
(2) On the registration of the order and minute, and not before, the resolution for reducing share capital as confirmed by the order shall take effect.
(1) A member of the company, past or present shall not be liable, in respect of any share to any call or contribution exceeding in amount the difference, if any, between the amount paid on the share or the reduced amount, if any, which is to be deemed to have been paid thereon, as the case may be, and the amount of the share as fixed by the minute of reduction:
Provided that, if any creditor entitled in respect of any debt or claim to object to the reduction of share capital is, by reason of his ignorance of the proceedings for reduction or of their nature and effect with respect to his debt or claim, not entered on the list of creditors, and after the reduction the company is unable, within the meaning of section 434, to pay the amount of his debt or claim, then—
(a) every person who was a member of the company at the date of the reg
If any officer of the company—
(a) knowingly conceals the name of any creditor entitled to object to the reduction;
(b) knowingly misrepresents the nature or amount of the debt or claim of any creditor; or
(c) abets or is privy to any such concealment or misrepresentation as aforesaid,
he shall be punishable with imprisonment for a term which may extend to one year, or with fine, or with both.
Where the share capital of a company is divided into different classes of shares, the rights attached to the shares of any class may be varied with the consent in writing of the holders of not less than three-fourths of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of the holders of the issued shares of that class—
(a) if provision with respect to such variation is contained in the memorandum or articles of the company, or
(b) in the absence of any such provision in the memorandum or articles, if such variation is not prohibited by the terms of issue of the shares of that class.]
-----------------------------
1. Subs. by Act 65 of 1960, sec. 26, for section 106 (w.e.f. 28-12-19
(1) If, in pursuance of any provision such as is referred to in section 106, the rights attached to any such class of shares are at any time varied, the holders of not less in the aggregate than ten per cent of the issued shares of that class, being persons who did not consent to or vote in favour of the resolution for the variation, may apply to the 1[Tribunal] to have the variation cancelled, and where any such application is made, the variation shall not have effect unless and until it is confirmed by the
1[Tribunal].
(2) An application under this section shall be made within twenty-one days after the date on which the consent was given or the resolution was passed, as the case may be, and may be made on behalf of the shareholders entitled to make the application by such one or more of their number as they may appoint in writing for
(1) A company shall not register a transfer of shares in, or debentures of, the company, unless a proper instrument of transfer duly stamped and executed by or on behalf of the transferor and by or on behalf of the transferee and specifying the name, address and occupation, if any, of the transferee, has been delivered to the company along with the certificate relating to the shares or debentures or if no such certificate is in existence, along with the letter of allotment of the shares or debentures:
Provided that where, on an application in writing made to the company by the transferee and bearing the stamp required for an instrument of transfer, it is proved to the satisfaction of the Board of directors that the instrument of transfer signed by or on behalf of the transferor and by or on behalf of the transferee has been lost, the company may register the transfer on such terms
(1) Except with the previous approval of the Central Government no individual, firm, group, constituent of a group, body corporate or bodies corporate under the same management, shall jointly or severally acquire or agree to acquire, whether in his or its own name or in the name of any other person, any equity shares in a public company or a private company which is a subsidiary of a public company, if the total nominal value of the equity shares intended to be so acquired exceeds, or would, together with the total nominal value of any equity shares already held in the company by such individual, firm, group, constituent of a group, body corporate or bodies corporate under the same management, exceed twenty-five per cent. of the paid-up equity share capital of such company.
(2) Where any individual, firm, group, constituent of a group, body corporate or bodies corporate under the s
(1) Every body corporate or bodies corporate under the same management, holding, whether singly or in the aggregate, ten per cent or more of the nominal value of the subscribed equity share capital of any other company shall, before transferring one or more such shares, give to the Central Government an intimation of its or their proposal to transfer such share, and every such intimation shall include a statement as to the particulars of the share proposed to be transferred, the name and address of the person to whom the share is proposed to be transferred, and share holding, if any, of the proposed transferee, in the concerned company and such other particulars as may be prescribed.
(2) Where, on receipt of an intimation given under sub-section (1) or otherwise, the Central Government is satisfied that as a result of such transfer, a change in the composition of the Board of direc
No body corporate or bodies corporate under the same management, which holds, or hold in the aggregate ten per cent or more of the nominal value of the equity share capital of a foreign company, having an established place of business in India, shall transfer any share in such foreign company to any citizen of India or any body corporate incorporated in India except with the previous approval of the Central Government and such previous approval shall not be refused unless the Central Government is of opinion that such transfer would be prejudicial to the public interest.]
----------------------------
1. Section 108C ins. by Act 58 of 1991, sec. 28 (w.r.e.f. 27-9-1991). Earlier section 108C were inserted by Act 41 of 1974, sec. 12 (w.e.f. 1-2-1975) and were omitted by Act 30 of 1984, sec. 52 (w.e.f. 1-8-1984).
(1) Where the Central Government is satisfied that as a result of the transfer of any share or block of shares of a company, a change in the controlling interest of the company is likely to take place and that such change would be prejudicial to the interests of the company or to the public interest, that Government may direct the company not to give effect to the transfer of any such share or block of shares and—
(a) where the transfer of such share or block of shares has already been registered not to permit the transferee or any nominee or proxy of the transferee, to exercise any voting or other rights attaching of such share or block of shares; and
(b) where the transfer of such share or block of shares has not been registered not to permit any nominee or proxy of the transferor to exercise any voting or other rights attaching
Every request made to the Central Government for according its approval to the proposal for the acquisition of any share referred to in section 108A or the transfer of any share referred to in section 108B shall be presumed to have been granted unless, within a period of sixty days from the date of receipt of such request, the Central Government communicates to the person by whom the request was made, that the approval prayed for cannot be granted.]
----------------------------
1. Section 108E ins. by Act 58 of 1991, sec. 28 (w.r.e.f. 27-9-1991). Earlier section 108E were inserted by Act 41 of 1974, sec. 12 (w.e.f. 1-2-1975) and were omitted by Act 30 of 1984, sec. 52 (w.e.f. 1-8-1984).
----------------------------
Nothing contained in section 108A [except sub-section (2) thereof] shall apply to the transfer of any share to, and nothing in section 108B or section 108C or section 108D shall apply to the transfer of any share by—
(a) any company in which not less than fifty-one per cent of the share capital is held by the Central Government;
(b) any corporation (not being a company) established by or under any Central Act;
(c) any financial institution.]
----------------------------
1. Section 108F ins. by Act 58 of 1991, sec. 28 (w.r.e.f. 27-9-1991). Earlier section 108F were inserted by Act 41 of 1974, sec. 12 (w.e.f. 1-2-1975) and were omitted by Act 30 of 1984, sec. 52 (w.e.f. 1-8-1984).
The provisions of sections 108A to 108F (both inclusive) shall apply to the acquisition or transfer of shares or share capital by or to, an individual firm, group, constituent of a group, body corporate or bodies corporate under the same management, who or which—
(a) is, in case of acquisition of shares or share capital, the owner in relation to a dominant undertaking and there would be, as a result of such acquisition, any increase—
(i) in the production, supply, distribution or control of any goods that are produced, supplied, distributed or controlled in India or any substantial part thereof by that dominant undertaking, or
(ii) in the provision or control of any services that are rendered in India or any substantial part thereof by that dominant undertaking; or
&nbs
The expressions “group”, “same management”, “financial institution”, “dominant undertaking” and “owner” used in sections 108A to 108G (both inclusive), shall have the meanings respectively assigned to them in the Monopolies and Restrictive Trade Practices Act, 1969.]
----------------------------
1. Section 108H ins. by Act 58 of 1991, sec. 28 (w.r.e.f. 27-9-1991). Earlier section 108H were inserted by Act 41 of 1974, sec. 12 (w.e.f. 1-2-1975) and were omitted by Act 30 of 1984, sec. 52 (w.e.f. 1-8-1984).
----------------------------
(1) Any person who acquires any share in contravention of the provisions of section 108A shall be punishable with imprisonment for a term which may extend to three years, or with fine which may extend to 2[fifty thousand rupees], or with both.
(2) (a) Every body corporate which makes any transfer of shares without giving any intimation as required by section 108B, shall be punishable with fine which may extend to 2[fifty thousand rupees].
(b) Where any contravention of the provisions of section 108B has been made by a company, every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years, or with fine which may extend to 2[fifty thousand rupees], or with both.
(3) (a) Every body corporate which makes any transfer of shares in c
A transfer of the share or other interest in a company of a deceased member thereof made by his legal representative shall, although the legal representative is not himself a member, be as valid as if he had been a member at the time of the execution of the instrument of transfer.
(1) Every holder of shares in, or holder of debentures of, a company may, at any time, nominate, in the prescribed manner, a person to whom his shares in, or debentures of, the company shall vest in the event of his death.
(2) Where the shares in, or debentures of, a company are held by more than one person jointly, the joint-holders may together nominate, in the prescribed manner, a person to whom all the rights in the shares or debentures of the company shall vest in the event of death of all the joint-holders.
(3) Notwithstanding anything contained in any other law for the time being in force or in any disposition, whether testamentary or otherwise, in respect of such shares in, or debentures of, the company, where a nomination made in the prescribed manner purports to confer on any person the right to vest the shares in, or debenture
(1) Any person who becomes a nominee by virtue of the provisions of section 109A, upon the production of such evidence as may be required by the Board and subject as hereinafter provided, elect, either—
(a) to be registered himself as holder of the share, or debenture, as the case may be; or
(b) to make such transfer of the share or debenture, as the case may be, as the deceased shareholder or debenture-holder, as the case may be, could have made.
(2) If the person being a nominee, so becoming entitled, elects to be registered as holder of the share or debenture, himself, as the case may be, he shall deliver or send to the company a notice in writing signed by him stating that he so elects and such notice shall be accompanied with the death certificate of the deceased shareholder or debe
(1) An application for the registration of a transfer of the shares or other interest of a member in a company may be made either by the transferor or by the transferee.
(2) Where the application is made by the transferor and relates to partly paid shares, the transfer shall not be registered, unless the company gives notice of the application to the transferee and the transferee makes no objection to the transfer within two weeks from the receipt of the notice.
(3) For the purposes of sub-section (2), notice to the transferee shall be deemed to have been duly given if it is despatched by prepaid registered post to the transferee at the address given in the instrument of transfer, and shall be deemed to have been duly delivered at the time at which it would have been delivered in the ordinary course of post.
(1) If a company refuses, whether in pursuance of any power of the company under its articles or otherwise, to register the transfer of, or the transmission by operation of law of the right to, any shares or interest of a member in, or debentures of, the company, it shall, within two months from the date on which the instrument of transfer, or the intimation of such transmission, as the case may be, was delivered to the company, send notice of the refusal to the transferee and the transferor or to the person giving intimation of such transmission, as the case may be, giving reasons for such refusal.
(2) The transferer or transferee, or the person who gave intimation of the transmission by operation of law, as the case may be, may appeal to the 2[Tribunal] against any refusal of the company to register the transfer or transmission, or against any failure on its part within the perio
Section 111 of the Companies Act, 1956, governs the procedures related to the refusal of registration of share transfers, the appeal process against such refusal, and the rectification of the register of members. It provides a framework for shareholders and companies to challenge or seek correction of entries in the register, ensuring transparency and protection of shareholder rights.
This comprehensive overview underscores that Section 111 of the Companies Act, 1956, primarily facilitates quick, procedural rectification and transfer registration, but complex ownership or fraud issues necessitate civil court intervention. Penalties ensure compliance, while appellate mechanisms safeguard shareholder rights.
(1) In this section unless the context otherwise requires, “company” means a company other than a company referred to in sub-section (14) of section 111 of this Act.
(2) Subject to the provisions of this section, the shares or debentures and any interest therein of a company shall be freely transferable:
2[Provided that if a company without sufficient cause refuses to register transfer of shares within two months from the date on which the instrument of transfer or the intimation of transfer, as the case may be, is delivered to the company, the transferee may appeal to the 3[Tribunal] and it shall direct such company to register the transfer of shares.]
4[(3) The 3[Tribunal] may, on an application made by a depository, company, participant or investor or the Securities and Exchange Board of In
(1) The certification by a company of any instrument of transfer of shares in, or debentures of, the company, shall be taken as a representation by the company to any person acting on the faith of the certification that there have been produced to the company such documents as on the face of them show a prima facie title to the shares or debentures in the transferor named in the instrument of transfer, but not as a representation that the transferor has any title to the shares or debentures.
(2) Where any person acts on the faith of an erroneous certification made by a company negligently, the company shall be under the same liability to him as if the certification had been made fraudulently.
(3) For the purposes of this section—
(a) an instrument of transfer shall be deemed
1[(1) Every company, unless prohibited by any provision of law or of any order of any Court, tribunal or other authority, shall, within three months after the allotment of any of its shares, debentures or debenture stock, and within two months after the application for the registration of the transfer of any such shares, debentures or debenture stock, deliver, in accordance with the procedure laid down in section 53, the certificates of all shares, debentures and certificates of debenture stocks allotted or transferred:
Provided that the 2[Central Government] may, on an application being made to it in the behalf by the company, extend any of the periods within which the certificates of all debentures and debenture stocks allotted or transferred shall be delivered under this sub-section, to a further period not exceeding nine months, if it is satisfied that it is not possible for th
(1) A public company limited by shares, if so authorised by its articles, may, with the previous approval of the Central Government with respect to any fully paid-up shares, issue under its common seal a warrant stating that the bearer of the warrant is entitled to the shares therein specified, and may provide, by coupons or otherwise, for the payment of the future dividends on the shares specified in the warrant.
(2) The warrant aforesaid is in this Act referred to as a “share warrant”.
(3) A share warrant shall entitle the bearer thereof to the shares therein specified, and the shares may be transferred by delivery of the warrant.
(1) On the issue of a share warrant, the company shall strike out of its register of members the name of the member then entered therein as holding the shares specified in the warrant as if he had ceased to be a member, and shall enter in that register the following particulars, namely:—
(a) the fact of the issue of the warrant;
(b) a statement of the shares specified in the warrant, distinguishing each share by its number; and
(c) the date of the issue of the warrant.
(2) The bearer of a share warrant shall, subject to the articles of the company, be entitled, on surrendering the warrant for cancellation and paying such fee to the company as the Board of directors may from time to time determine
If any person deceitfully personates an owner of any share or interest in a company, or of any share warrant or coupon issued in pursuance of this Act, and thereby obtains or attempts to obtain any such share or interest or any such share warrant or coupon, or receives or attempts to receive any money due to any such owner, he shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to fine.
No company shall, after the commencement of this Act, issue any debentures carrying voting rights at any meeting of the company, whether generally or in respect of particular classes of business.
(1) A trust deed for securing any issue of debentures shall be in such form and shall be executed with in such period as may be prescribed.
(2) A copy of the trust deed shall be open to inspection to any member or debenture holder of the company and he shall also be entitled to obtain copies of such trust deed on payment of such sum as may be prescribed.
(3) If a copy of the trust deed is not made available for inspection or is not given to any member or debenture holder, the company and every officer of the company who is in a default, shall be punishable, for each offence, with fine which may extend to five hundred rupees for every day during which the offence continues.]
----------------------------
1. Ins. by Act 53 of 2000, sec. 48 (w.e.
(1) No company shall issue a prospectus or a letter of offer to the public for subscription of its debentures, unless the company has, before such issue, appointed one or more debenture trustees for such debentures and the company has, on the face of the prospectus or the letter of offer, stated that the debenture trustee or trustees have given their consent to the company to be so appointed:
Provided that no person shall be appointed as a debenture trustee, if he—
(a) beneficially holds shares in the company;
(b) is beneficially entitled to moneys which are to be paid by the company to the debenture trustee;
(c) has entered into any guarantee in respect of principal debts secured by the debentur
(1) Where a company issues debentures after the commencement of this Act, it shall create a debenture redemption reserve for the redemption of such debentures, to which adequate amounts shall be credited, from out of its profits every year until such debentures are redeemed.
(2) The amounts credited to the debenture redemption reserve shall not be utilised by the company except for the purposes aforesaid.
(3) The company referred to in sub-section (1) shall pay interest and redeem the debentures in accordance with the terms and conditions of their issue.
(4) Where a company fails to redeem the debentures on the date of maturity, the 2[Tribunal] may, on the application of any or all the holders of debentures shall, after hearing the parties concerned, direct, by order, the company to redeem the
(1) A copy of any trust deed for securing any issue of debentures shall be forwarded to the holder of any such debentures or any member of the company, at his request and within seven days of the making thereof, on payment—
(a) in the case of a printed trust deed of 1[such sum as may be prescribed]; and
(b) in the case of a trust deed which has not been printed, of 2[such sum as may be prescribed] for every one hundred words or fractional part thereof required to be copied.
(2) If a copy is refused, or is not forwarded within the time specified in sub-section (1), the company, and every officer of the company who is in default, shall be punishable, for each offence, with fine which may extend to 3[five hundred rupees] and with a further fine which may extend
(1) Subject to the provisions of this section, any provision contained in a trust deed for securing an issue of debentures, or in any contract with the holders of debentures secured by a trust deed, shall be void insofar as it would have the effect of exempting a trustee thereof from, or indemnifying him against, liability for breach of trust, where he fails to show the degree of care and diligence required of him as trustee, having regard to the provisions of the trust deed conferring on him any powers, authorities or discretions.
(2) Sub-section (1) shall not invalidate—
(a) any release otherwise validly given in respect of anything done or omitted to be done by a trustee before the giving of the release; or
(b) any provision enabling such a release to be
A condition contained in any debentures or in any deed for securing any debentures, whether issued or executed before or after the commencement of this Act, shall not be invalid by reason only that thereby, the debentures are made irredeemable or redeemable only on the happening of a contingency however, remote, or on the expiration of period, however long.
(1) Where either before or after the commencement of this Act, a company has redeemed any debentures previously issued, then,—
(a) unless any provision to the contrary, whether express or implied, is contained in the articles or in the conditions of issue, or in any contract entered into by the company; or
(b) unless the company has by passing a resolution to that effect or by some other act manifested its intention that the debentures shall be cancelled,
the company shall have, and shall be deemed always to have had, the right to keep the debentures alive for the purposes of re-issue; and in exercising such a right, the company shall have, and shall be deemed always to have had, power to re-issue the debentures either by re-issuing the same debenture or by issuing other debentures in th
A contract with a company to take up and pay for any debentures of the company may be enforced by a decree for specific performance.
(a) a receiver is appointed on behalf of the holders of any debentures of a company secured by a floating charge, or
(b) possession is taken by or on behalf of those debenture-holders of any property comprised in or subject to the charge,
then, if the company is not at the time in course of being wound up, the debts which in every winding up are, under the provisions of Part VII relating to preferential payments, to be paid in priority to all other debts, shall be paid forthwith out of any assets coming to the hands of the receiver or other person taking possession as aforesaid in priority to any claim for principal or interest in respect of the debentures.
(2) In the application of the provisions aforesaid, section 530 shall be construed as if the provision for payment of accrued holida
Section 123 of the Companies Act, 1956, primarily governs the declaration and payment of dividends by companies. It establishes the legal framework ensuring dividends are paid only out of profits and stipulates procedural and statutory requirements to prevent misuse of company funds. This section aligns with principles of corporate governance and financial discipline, aiming to protect creditors and shareholders' interests.
Section 123 mandates that dividends can only be declared out of profits of the company for the financial year or accumulated profits from previous years. It prohibits the distribution of dividends out of capital, revaluation reserves, or unrealized gains. The section also provides for the declaration of interim dividends and specifies procedural requirements for their approval.
Section 123 applies to all companies governed by the Companies Act, 1956, regarding the declaration and payment of dividends. It emphasizes the importance of maintaining the company's financial health and ensuring that dividends are paid only from genuine profits. The section also influences the company's financial reporting, dividend policy, and compliance obligations.
Contravention of Section 123 can lead to penalties under the Companies Act, including fines and imprisonment for officers responsible for unlawful payments. The section also empowers the Registrar of Companies to take corrective actions, including disallowing unlawful dividends and directing recovery of amounts paid out of capital or other impermissible sources.
Note: The references are based on the provided sources, primarily the legal provisions and case law summaries related to Section 123 and dividend declaration under the Companies Act, 1956.
In this Part, the expression “charge” includes a mortgage.
(1) Subject to the provisions of this Part, every charge created on or after the 1st day of April, 1914, by a company and being a charge to which this section applies shall, so far as any security on the company’s property or undertaking is conferred thereby, be void against the liquidator and any creditor of the company, unless the prescribed particulars of the charge, together with the instrument, if any, by which the charge is created or evidenced, or a copy thereof verified in the prescribed manner, are filed with the registrar for registration in the manner required by this Act within 1[thirty] days after the date of its creation:
2[Provided that the Registrar may allow the particulars and instrument or copy as aforesaid to be filed within thirty days next following the expiry of the said period of thirty days on payment of such additional fee not exceeding ten times the amoun
Where any charge on any property of a company required to be registered under section 125 has been so registered, any person acquiring such property or any part thereof, or any share or interest therein, shall be deemed to have notice of the charge as from the date of such registration.
(1) Where a company acquires any property which is subject to a charge of any such kind as would, if it had been created by the company after the acquisition of the property, have been required to be registered under this Part, the company shall cause the prescribed particulars of the charge, together with a copy (certified in the prescribed manner to be a correct copy) of the instrument, if any, by which the charge was created or is evidenced, to be delivered to the Registrar for registration in the manner required by this Act within 1[thirty] days after the date on which the acquisition is completed:
Provided that, if the property is situate, and the charge was created, outside India, 1[thirty] days after the date on which a copy of the instrument could, in due course of post and if despatched with due diligence, have been received in India shall be substituted for 1[thirty] days
Where a series of debentures containing, or giving by reference to any other instrument, any charge to the benefit of which the debenture-holders of that series are entitled pari passu is created by a company, it shall, for the purposes of section 125, be sufficient, if they are filed with the Registrar, within 1[thirty] days after the execution of the deed containing the charge or, if there is no such deed, after the execution of any debentures of the series, the following particulars:—
(a) the total amount secured by the whole series;
(b) the dates of the resolutions authorising the issue of the series and the date of the covering deed, if any, by which the security is created or defined;
(c) a general description of the property charged; and
&
Where any commission allowance or discount has been paid or made either directly or indirectly by a company to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any debentures of the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any such debentures, the particulars required to the filed for registration under sections 125 and 128 shall include particulars as to the amount or rate per cent. of the commission, discount or allowance so paid or made; but an omission to do this shall not affect the validity of the debentures issued:
Provided that the deposit of any debentures as security for any debt of the company shall not, for the purposes of this section, be treated as the issue of the debentures at a discount.
1[(1) The Registrar shall, in respect of each company, cause to be kept a register containing the particulars of all the charges requiring registration under this Part.
(1A) Every company shall forward to the Registrar for being entered in the register kept under sub-section (1) the particulars of all the charges requiring registration under this Part in such form and manner, and after payment of such fees as may be prescribed.
(1B) The particulars of the charges referred to in sub-section (1) shall relate to,—
(a) in the case of a charge to the benefit of which the holders of a series of debentures are entitled, such particulars as are specified in sections 128 and 129;
(b) in the case of any other charge,—
&nbs
The Registrar shall keep a chronological index, in the prescribed form and with the prescribed particulars, of the charges registered with him in pursuance of this Part.
The Registrar shall give a certificate under his hand of the registration of any charge registered in pursuance of this Part, stating the amount thereby secured; and the certificate shall be conclusive evidence that the requirements of this Part as to registration have been complied with.
(1) The company shall cause a copy of every certificate of registration given under section 132, to be endorsed on every debenture or certificate of debenture stock which is issued by the company and the payment of which is secured by the charge so registered:
Provided that nothing in this sub-section shall be construed as requiring a company to cause a certificate of registration of any charge so given to be endorsed on any debenture or certificate of debenture stock issued by the company before the charge was created.
(2) If any person knowingly delivers, or wilfully authorises or permits the delivery of, any debenture or certificate of debenture stock which, under the provisions of sub-section (1), is required to have endorsed on it a copy of a certificate of registration without the copy being so endorsed upon it, he shall, without p
(1) It shall be the duty of a company to file with the Registrar for registration the particulars of every charge created by the company, and of every issue of debentures of a series, requiring registration under this Part; but registration of any such charge may also be effected on the application of any person interested therein.
(2) Where registration is effected on the application of some person other than the company, that person shall be entitled to recover from the company the amount of any fees properly paid by him to the Registrar on the registration.
Whenever the terms or conditions, or the extent or operation, of any charge registered under this Part are or is modified, it shall be the duty of the company to send to the Registrar the particulars of such modification, and the provisions of this Part as to registration of a charge shall apply to such modification of the charge.
Every company shall cause a copy of every instrument creating any charge requiring registration under this Part to be kept at the registered office of the company:
Provided that, in the case of a series of uniform debentures, a copy of one debenture of the series shall be sufficient.
(1) If any person obtains an order for the appointment of a receiver of, or of a person to manage, the property of a company, or if any person appoints such receiver or person under any powers contained in any instrument, he shall, within 1[thirty] days from the date of the passing of the order or of the making of the appointment under the said powers, give notice of the fact to the Registrar; and the Registrar shall, on payment of the prescribed fee, enter, the fact in the Register of charges.
(2) Where any person so appointed under the powers contained in any instrument ceases to act as such, he shall, on so deceasing, give to the Registrar notice to that effect; and the Registrar shall enter the notice in the Register of charges.
(3) If any person makes default in complying with the requirements of sub-section (1) or (2), he shall be
(1) The company shall give intimation to the Registrar of the payment or satisfaction, 1[in full], of any charge relating to the company and requiring registration under this Part, within 2[thirty] days from the date of such payment or satisfaction.
(2) The Registrar shall, on receipt of such intimation, cause a notice to be sent to the holder of the charge calling upon him to show cause within a time (not exceeding fourteen days) specified in such notice, why payment or satisfaction should not be recorded as intimated to the Registrar.
(3) If no cause is shown, the Registrar shall order that a memorandum of satisfaction 3[***] shall be entered in the register of charges.
(4) If cause is shown, the Registrar shall record a note to that effect in the register, and shall inform the company that
The Registrar may, on evidence being given to his satisfaction with respect to any registered charge,—
(a) that the debt for which the charge was given has been paid or satisfied in whole or in part; or
(b) that part of the property or undertaking charged has been released from the charge or has ceased to form part of the company’s property or undertaking,
enter in the register of charges a memorandum of satisfaction in whole or in part, or of the fact that part of the property or undertaking has been released from the charge or has ceased to form part of the company’s property or undertaking, as the case may be, notwithstanding the fact that no intimation has been received by him from the company.
Where the Registrar enters a memorandum of satisfaction in whole or in part, in pursuance of section 138 or 139, he shall furnish the company with a copy of the memorandum.
(1) The Central Government, on being satisfied—
(a) that the omission to file with the Registrar the particulars of any charge created by a company or of any charge subject to which any property has been acquired by the company or of any modification of any such charge or of any issue of debentures of a series, or that the omission to register any charge within the time required by this Part or that the omission to give intimation to the Registrar of the payment or satisfaction of a charge, within the time required by this Part, or that the omission or mis-statement of any particular with respect to any such charge, modification or issue of debentures of a series or with respect to any memorandum of satisfaction or other entry made in pursuance of section 138 or 139, was accidental or due to inadvertence or some other sufficient cause or is not of a nature to prejudice the posit
(1) If default is made in filing with the Registrar for registration the particulars—
(a) of any charge created by the company;
(b) of the payment or satisfaction 1[***] of a debt in respect of which a charge has been registered under this Part; or
(c) of the issues of debentures of a series,
requiring registration with the Registrar under the provisions of this Part, then, unless the registration has been effected on the application of some other person, the company, and every officer of the company or other person who is in default, shall be punishable with fine which may extend to 2[five thousand rupees] for every day during which the default continues.
(2) Subject as aforesaid, if any compan
(1) Every company shall keep at its registered office a register of charges and enter therein all charges specifically affecting property of the company and all floating charges on the undertaking or on any property of the company, giving in each case—
(i) a short description of the property charged;
(ii) the amount of the charge; and
(iii) except in the case of securities to bearer, the names of the persons entitled to the charge.
(2) If any officer of the company knowingly omits, or wilfully authorises or permits the omission of, any entry required to be made in pursuance of sub-section (1), he shall be punishable with fine which may extend to 1[five thousand rupees].
--------------------------
(1) The copies of instruments creating charges kept in pursuance of section 136, and the register of charges kept in pursuance of section 143, shall be open during business hours (but subject to such reasonable restrictions as the company in general meeting may impose, so that not less than two hours in each day are allowed for inspection) to the inspection of any creditor or member of the company without fee, at the registered office of the company.
(2) The register of charges kept in pursuance of section 143 shall also be open, during business hours but, subject to the reasonable restrictions aforesaid, to the inspection of any other person on payment of a fee of 1[such sum as may be prescribed] for each inspection, at the registered office of the company.
(3) If inspection of the said copies or register is refused the company, and eve
In respect of 1[any charge created before, and remaining unsatisfied at, the commencement of this Act,] which, if this Act had been in force at the relevant time, would have had to be registered by the company in pursuance of this Part but which did not require registration under the Indian Companies Act, 1913 (7 of 1913) and in respect of all matters relating to such charge, the provisions of this Part shall apply and have effect in all respects, as if the date of commencement of this Act had been substituted therein for the date of creation of the charge, or the date of completion of the acquisition of the property subject to the charge, as the case may be.
Nothing contained in this section shall be deemed to affect the relative priorities as they existed immediately before the commencement of this Act, as between charges on the same property.
&nb
(1) A company shall, as from the day on which it begins to carry on business, or as from the 1[thirtieth] day after the date of its incorporation, whichever is earlier, have a registered office to which all communications are notices may be addressed.
(2) Notice of the situation of the registered office, and of every change therein, shall be given within 2[thirty] days after the date of the incorporation of the company or after the date of the change, as the case may be, to the Registrar who shall record the same:
Provided that except on the authority of a special resolution passed by the company, the registered office of the company shall not be removed—
(a) in the case of an existing company, outside the local limits of any city, town or village where such office is situated at the commen
(1) Every company—
(a) shall paint or affix its name 1[and the address of its registered office], and keep the same painted or affixed, on the outside of every office or place in which its business is carried on, in a conspicuous position, in letters easily legible; and if the characters employed therefor are not those of the language, or of one of the languages, in general use in that locality, also in the characters of that language or of one of those languages;
(b) shall have its name engraven in legible characters on its seal; and
(c) shall have its name 1[and the address of its registered office] mentioned in legible characters in all its business letters, in all its bill heads and letter paper, and in all its notices 2[***] and other official publications; 3[and also have its na
Where any notice, advertisement or other official publication, or any business letter, bill head or letter paper, of a company contains a statement of the amount of the authorised capital of the company, such notice, advertisement or other official publication, or such letter, bill head or letter paper, shall also contain a statement, in an equally prominent position and in equally conspicuous characters, of the amount of the capital which has been subscribed and the amount paid-up.
(2) If default is made in complying with the requirements of sub-section (1), the company, and every officer of the company who is in default, shall be punishable with fine which may extend to 1[ten thousand rupees].
----------------------------
1. Subs. by Act 53 of 2000, sec. 58, for “one thousand rupees”
(1) Where a company having a share capital has issued a prospectus inviting the public to subscribe for its shares, the company shall not commence any business or exercise any borrowing powers, unless—
(a) shares held subject to the payment of the whole amount thereof in cash have been allotted to an amount not less in the whole than the minimum subscription;
(b) every director of the company has paid to the company, on each of the shares taken or contracted to be taken by him and for which he is liable to pay in cash, a proportion equal to the proportion payable on application and allotment on the shares offered for public subscription;
(c) no money is, or may become, liable to be repaid to applicants for any shares or debentures which have been offered for public subscription by rea
(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, 1[***] 2[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
(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.
(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-sections (1), (2) or (3), the company and every officer of the company who is in default, shall be punishable wit
(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, 1[***] 2[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
The register and index of beneficial owners maintained by a depository under section 11 of the Depositories Act, 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.]
----------------------------------
1. Ins. by Act 22 of 1996, sec. 30 and Sch. (w.r.e.f. 20-9-1995).
---------------------------------
No notice of any trust, express, implied or constructive, shall be entered on the register of members or of debenture-holders 1[***].
----------------------------------
1. The words “or be receivable by the Registrar” omitted by Act 53 of 1963, sec. 6 (w.e.f. 1-1-1964).
----------------------------------
2[(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.]
3[(2) The provision of this section shall not apply on and after the commencement of the Companies (Amendment) Act, 2000.]
--------------------------
1. Ins. by Act 53 of 1963, sec. 7 (w.e.f. 1-1-1964).
2. Section 153A renumbered as sub-section (1) thereof by Act 53 of 2000, sec. 63 (w.e.f. 13-12-2000).
3. Ins. by Act 53 of 2000, sec. 63 (w.e.f. 13-12-2000).
------------------------
(1) Notwithstanding anything contained in section 153, where any shares in, or debenture, of, a company are held in trust by any person (hereinafter 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 tr
(1) A company may, after giving not less than seven days’ previous notice by advertisement in some newspapers 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 fifty-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 1[five thousand rupees] for every day during which the register is so closed.
[Rep. by the Companies (Amendment) Act, 1988 (31 of 1988) sec. 21 (w.e.f. 31-5-1991).]
[Rep. by the Companies (Amendment) Act, 1988 (31 of 1988) sec. 21 (w.e.f. 31-5-1991).]
(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”).
(2) The company shall, within 1 [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 1 [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
(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 therefrom 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 newspapers 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.
&nb
(1) Every company having a share capital shall within 1[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, 2[***] 3[managers and secretaries], pas
(1) Every company not having a share capital shall, within 1[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;
2[(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, where the directors of the company 3[***] 4[its manager and its secretary] as are set out in section 303.
(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 1[***] manager or secretary, by two directors of the company, one of whom shall be the managing director where there is one:
2[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.]
(2) There shall also be filed with the Registrar along with the return a certificate signed by 3[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
(1) If a company fails to comply with any of the provisions contained in sections 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 1[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.
-------------------------------
1. Subs. by Act 53 of 2000, sec. 70, for “fifty rupees” (w.e.f. 13-12-2000).
-------------------------------
(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:
1[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 of 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, 2[and]
&
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.
(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) Th
1[(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 on 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 p
(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:
If default is made in holding a meeting of the company in accordance with section 166, or in complying with any directions of 1[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 2[fifty thousand rupees] 3[and in the case of a continuing default, with a further fine which may extend to 4[two thousand five hundred rupees] for every day after the first during which such default continues].
-------------------------------
1. Subs. by Act 11 of 2003, sec. 23, for “Central Government”.
2. Subs. by Act 53 of 2000, sec. 73, for “five thousand rupees” (w.e.f. 13-12-2000).
3. Ins.
(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 req
Section 169 of the Companies Act, 1956, provides the statutory framework for the removal of directors by the shareholders through an ordinary resolution, subject to certain procedural safeguards. It is a vital provision balancing the rights of shareholders to control management and the rights of directors to fair treatment.
Section 169 empowers shareholders to remove a director before the expiry of his term by passing an ordinary resolution, after giving a special notice under Section 190. The section also prescribes the procedure for calling a meeting for such removal, including the right of the director to be heard and to make representations.
Failure to comply with the procedure, such as not issuing proper notice or denying the director an opportunity to be heard, renders the removal invalid. The director can challenge the removal as illegal or oppressive, and courts or tribunals may set aside such resolutions.
In summary, Section 169 of the Companies Act, 1956, ensures that directors are removed only through a fair, transparent process with adequate notice and opportunity to be heard. Non-compliance or mala fide actions render such resolutions invalid, and directors aggrieved by such illegal removals can seek recourse through courts or tribunals for declaration of invalidity. The provision underscores the importance of natural justice and procedural fairness in the management of companies.
(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.
&nbs
(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 compan
(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 authorised 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 address 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
(1) For the purposes of this section—"
(a) in the case of an annual general meeting, all businesses 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
(1) Unless the articles of the company provide for a larger number, five members personally present in the case of 1[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
(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.
(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
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.
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.
(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,—
1[(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 c
(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.
Notwithstanding 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.
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.
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.
(1) Where a poll is to be taken, the chairman of the meeting shall appoint two scrutineers to scrutinise 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 a scrutineer from office and to fill vacancies in the office of scrutineer arising from such removal or from any other cause.
(3) Of the two srcutineers 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.
(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.
(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.
(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.<
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 his 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.
&n
(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.]
------------------------------
1. Ins. by Act 65 of 1960, sec. 49 (w.e.f. 28-12-1960).
------------------------------
(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 s
(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 (41 of 1974) or within thirty days after his becoming such beneficial owner, whichever is later,
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.]
------------------------------
1. Ins. by Act 41 of 1974, sec. 15 (w.e.f. 1-2-1975).
------------------------------
(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—
(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, 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
(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 1 [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 [(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.]
----------
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.
(1) A copy of every resolution 1 [(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 2 [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 3 [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
(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 meting 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 therefor, 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 acknowledgment due, or by any other method as may be prescribe
1[(1) Every company shall cause minutes of all proceedings of every general meeting and of all proceedings of every meeting of its Board of directors or of every committee of the Board, to be kept by making within 2[thirty] days of the conclusion of every such meeting concerned, entries thereof in books kept for that purpose with their pages consecutively numbered.
(1A) Each page of every such book shall be initialled or signed and the last page of the record of proceedings 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
Minutes of meetings kept in accordance with the provisions of section 193 shall be evidence of the proceedings recorded therein.]
-------------------------------
1. Subs. by Act 65 of 1960, sec. 53, for section 194 (w.e.f. 28-12-1960).
-------------------------------
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 1[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.
-------------------------------
1. Subs. by Act 65 of 1960, sec. 54, for certain words (w.e.f. 28-12-1960).
-------------------------------
(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 1[such sum as may be prescribed] for every one hundred words or fractional part thereof required to be copied.
&nb
(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 1[five thousand rupees].
------------------------------------
1. Subs. by Act 53 of 2000, sec. 83, for “five hundred rupees” (w.e.f. 13-12-2000).
------------------------------------
Notwithstanding anything contained in this Act or any other law or any agreement or instrument, no company shall, after the commencement of the Companies (Amendment) Act, 1960 (65 of 1960), appoint or employ at the same time, or after the expiry of six months from such commencement, continue the appointment or employment at the same time, of more than one of the following categories of managerial personnel, namely:—
(a) managing director.
1[***]
(d) manager.]
------------------------------------
1. Clauses (b) and (c) omitted by Act 53 of 2000, sec. 84 (w.e.f. 13-12-2000).
(1) The total managerial remuneration payable by a public company or a private company which is a subsidiary of a public company, to its directors and its 2[***] manager in respect of any financial year shall not exceed eleven per cent of the net profits of that company for that financial year computed in the manner laid down in sections 349 3[and 350], except that the remuneration of the directors shall not be deducted from the gross profits.
4[***]
(2) The percentage aforesaid shall be exclusive of any fees payable to directors under sub-section (2) of section 309.
(3) Within the limits of the maximum remuneration specified in sub-section (1), a company may pay a monthly remuneration to its managing or whole-time director in accordance with the provisions of section 309 or to its manager in
(1) Where any commission or other remuneration payable to any officer or employee of a company (not being a director 1[***] or a manager) is fixed at a percentage of, or is otherwise based on, the net profits of the company, such profits shall be calculated in the manner set out in sections 349 2[and 350].
(2) Any provision in force at the commencement of this Act for the payment of any commission or other remuneration in any manner based on the net profits of a company, shall continue to be in force for a period of one year from such commencement; and thereafter shall become subject to the provisions of sub-section (1).
----------------------------------
1. The words “, the managing agent, secretaries and treasurers” omitted by Act 53 of 2
(1) No company shall pay to any officer or employee thereof, whether in his capacity as such or otherwise, remuneration free of any tax, or otherwise calculated by reference to, or varying with, any tax payable by him, or the rate of standard rate of any such tax, or the amount thereof.
Explanation.—In this sub-section, the expression “tax” comprises any kind of income-tax including super-tax.
(2) Where by virtue of any provision in force immediately before the commencement of this Act, whether contained in the company’s articles, or in any contract made with the company, or in any resolution passed by the company in general meeting or by the company’s Board of directors, any officer or employee of the company holding any office at the commencement of this Act is entitled to remuneration in any of the modes prohibited by sub-section (1),
(1) Save as provided in this section, any provision, whether contained in the articles of a company or in an agreement with a company or in any other instrument, for exempting any officer of the company or any person employed by the company as auditor from, or indemnifying him against, any liability which, by virtue of any rule of law, would otherwise attach to him in respect of any negligence, default, misfeasance, breach of duty or breach of trust of which he may be guilty in relation to the company, shall be void:
Provided that a company may, in pursuance of any such provision as aforesaid, indemnify any such officer or auditor against any liability incurred by him in defending any proceedings, whether civil or criminal, in which judgment is given in his favour or in which he is acquitted or discharged or in connection with any application under section 633 in which relief is gr
(1) If any person, being an undischarged insolvent,—
(a) discharges any of the functions of a director, or acts as or discharges any of the functions of the 1[***] manager, of any company; or
(b) directly or indirectly takes part or is concerned in the promotion, formation or management of any company,
he shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to 2[fifty thousand rupees], or with both.
(2) In this section, “company” includes—
(a) an unregistered company; and
(b) a body corporate incorporated outside India, which has an established place of business within India.
&n
(1) Where—
(a) a person is convicted of any offence in connection with the promotion, formation or management of a company; or
(b) in the course of winding up a company it appears that a person—
(i) has been guilty of any offence for which he is punishable (whether he has been convicted or not) under section 542; or
(ii) has otherwise been guilty, while an officer of the company, of any fraud or misfeasance in relation to the company or of any branch of his duty to the company;
the 1 [Court or the Tribunal, as the case may be,] may make an order that that person shall not, without the leave of the 1 [Court or the Tribunal, as the case may be,] be a director of, or in any way, whether directly or indi
1[(1) Save as provided in sub-section (2), no company shall after the commencement of this Act, appoint or employ any firm or body corporate to or in any office or place of profit under the company, other than the office of 2[***] trustee for the holders of debentures of the company, for a term exceeding five years at a time:
Provided that the initial appointment or employment of a firm or body corporate to or in any office or place of profit as aforesaid may, with the approval of the Central Government, be made for a term not conceding ten years.]
3[***]
(3) Any firm or body corporate holding at the commencement of this Act any office or place of profit under the company shall, unless its term of office expires earlier, be deemed to have vacated its office immediately on the expiry of five ye
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000) sec. 91 (w.e.f. 13-12-2000).]
----------------------------
1. Ins. by Act 41 of 1974, sec. 17 (w.e.f. 1-2-1975).
----------------------------
(1) No dividend shall be declared or paid by a company for any financial year except out of the profits of the company for that year arrived at after providing for depreciation in accordance with the provisions of sub-section (2) or out of the profits of the company for any previous financial year or years arrived at after providing for depreciation in accordance with those provisions and remaining undistributed or out of both or out of moneys provided by the Central Government or a State Government for the payment of dividend in pursuance of a guarantee given by that Government:
Provided that—
(a) if the company has not provided for depreciation for any previous financial year or years which falls or fall after the commencement of the Companies (Amendment) Act, 1960 (65 of 1960), it shall, before declaring or paying dividend for any
(1) Where, after the commencement of the Companies (Amendment) Act, 1974, a dividend has been declared by a company but has not been paid 2[or claimed] within 3[thirty days] from the date of the declaration, to any shareholder entitled to the payment of the dividend, the company shall, within seven days from the date of expiry of the said period of 3[thirty days], transfer the total amount of dividend which remains unpaid 4[or unclaimed] within the said period of 3[thirty days], to a special account to be opened by the company in that behalf in any scheduled bank, to be called “Unpaid Dividend Account of ............ Company Limited/Company (Private) Limited”.
5[Explanation.—In this sub-section, the expression “dividend which remains unpaid” means any dividend the warrant in respect thereof has not been encashed or which has otherwise not been paid or claimed.]
Any person claiming to be entitled to any money transferred under sub-section (5) of section 205A to the general revenue account of the Central Government, may apply to the Central Government for an order for payment of the money claimed; and the Central Government may, if satisfied, whether on a certificate by the company or otherwise, that such person is entitled to the whole or any part of the money claimed, make an order for the payment to that person of the sum due to him after taking such security from his as it may think fit:]
2[Provided that nothing contained in this section shall apply to any person claiming to be entitled to any money transferred to the Fund referred to in section 205C on and after the commencement of the Companies (Amendment) Act, 1999.]
--------------------------
(1) The Central Government shall establish a fund to be called the Investor Education and Protection Fund (hereafter in this section referred to as the “Fund”).
(2) There shall be credited to the Fund the following amounts, namely:—
(a) amounts in the unpaid dividend accounts of companies;
(b) the application moneys received by companies for allotment of any securities and due for refund;
(c) matured deposits with companies;
(d) matured debentures with companies;
(e) the interest accrued on the amounts referred to in clauses (a) to (d);
(f) grants and donations given to the Fund by the Central Gover
(1) No dividend shall be paid by a company in respect of any share therein, except—
(a) to the registered holder of such share or to his order or to his bankers; or
(b) in case a share warrant has been issued in respect of the share in pursuance of section 114, to the bearer of such warrant or to his bankers.
(2) Nothing contained in sub-section (1) shall be deemed to require the bankers of a registered shareholder to make a separate application to the company for the payment of the dividend.
Where any instrument of transfer of shares has been delivered to any company for registration and the transfer of such shares has not been registered by the company, it shall notwithstanding anything contained in any other provision of this Act,—
(a) transfer the dividend in relation to such shares to the special account referred to in section 205A unless the company is authorised by the registered holder of such share in writing to pay such dividend to the transferee specified in such instrument of transfer; and
(b) keep in abeyance in relation to such shares any offer of rights shares under clause (a) of sub-section (1) of section 81 and any issue of fully paid-up bonus shares in pursuance of sub-section (3) of section 205.]
--------------
Where a dividend has been declared by a company but has not been paid, or the warrant in respect thereof has not been posted, within thirty days from the date of declaration, to any shareholder entitled to the payment of the dividend, every director of the company shall, if he is knowingly a party to the default, be punishable with simple imprisonment for a term which may extend to three years and shall also be liable to a fine of one thousand rupees for every day during which such default continues and the company shall be liable to pay simple interest at the rate of eighteen per cent, per annum during the period for which such default continues:
Provided that no offence shall be deemed to have been committed within the meaning of the foregoing provisions in the following cases, namely:—
(a) where the dividend could not be paid by re
(1) Where any shares in a company are issued for the purpose of raising money to defray the expenses of the construction of any work or building, or the provision of any plant, which cannot be made profitable for a lengthy period, the company may—
(a) pay interest on so much of that share capital as is for the time being paid up, for the period and subject of the conditions and restrictions mentioned in sub-sections (2) to (7); and
(b) charge the sum so paid by way of interest, to capital as part of the cost of construction of the work or building or the provision of the plant.
(2) No such payment shall be made unless it is authorised by the articles or by a special resolution.
(3) No such payment, whether authorised by the articles or by spec
1[(1) Every company shall keep at its registered office proper books of account with respect to—
(a) all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure take place;
(b) all sales and purchases of goods by the company; 2[***]
(c) the assets and liabilities of the company; 3[and]
3[(d) in the case of a company pertaining to any class of companies engaged in production, processing, manufacturing or mining activities, such particulars relating to utilisation of material or labour or to other items of cost as may be prescribed if such class of companies is required by the Central Government to include such particulars in the books of account:]
(1) The books of account and other books and papers of every company shall be open to inspection during business hours—
(i) by the Registrar, or
2[(ii) by such officer of the Government as may be authorised by the Central Government in this behalf;
(iii) by such officers of the Securities of Exchange Board of India as may be authorised by it:
Provided that such inspection may be made without giving any previous notice to the company or any officer thereof:
Provided further that the inspection by the Securities and Exchange Board of India shall be made in respect of matters covered under sections referred to in section 55A.]
(2) It shall be the duty of
(1) At every annual general meeting of a company held in pursuance of section 166, the Board of directors of the company shall lay before the company—
(a) a balance-sheet as at the end of the period specified in sub-section (3); and
(b) a profit and loss account for that period.
(2) In the case of a company not carrying on business for profit, an income and expenditure account shall be laid before the company at its annual general meeting instead of a profit and loss account, and all references to “profit and loss account”, “profit” and “loss” in this section and elsewhere in this Act, shall be construed, in relation to such a company, as references respectively to the “income and expenditure account”, “the excess of income over expenditure”, and “the excess of expenditure over income”.<
Legal Comments
"Scope" - Non-submission of balance-sheet and profit and loss account by the Board constitutes an offence under Section 210 - [Public Prosecutor VS H. R. Basavaraj - 1999 0 Supreme(Mad) 1988]
"Essential ingredients" - There must be a failure to lay before the AGM the balance-sheet and P&L as required; otherwise no offence under 210(1)/(3) arises; the offense targets default by directors in presenting financials at AGM - [KISHAN PRASAD PALAYPU, S/O. P. SAMBAIAH VS REGISTRAR OF COMPANIES, HYDERABAD - 2006 0 Supreme(AP) 1412], [BIJOY KUMAR KARNANI VS ASSISTANT REGISTRAR OF COMPANIES, WET BENGAL - 1984 0 Supreme(Cal) 328]
"Scope – Adjourment/circular override" - Prosecution under 210(1)/(3) can be defeated if the company followed a valid circular allowing adjournment of the AGM for laying accounts; circulars may suffice to quash proceedings where compliant, but not always; depends on jurisdiction and facts - [M. D. MUNDHRA VS ASSISTANT REGISTRAR OF COMPANIES - 1978 0 Supreme(Cal) 636], [BIJOY KUMAR KARNANI VS ASSISTANT REGISTRAR OF COMPANIES, WET BENGAL - 1984 0 Supreme(Cal) 328]
"Resignation of director" - A director who resigns with intimation to ROC ceases to be liable for filing annual returns/financials for periods after cessation, affecting liability under 210 for that director - [Krishan kumar khemka VS Registrar of Companies, West Bengal - Crimes (1986)]
"Continuing/offence nature" - Offences under 210(5) can be continuing offences in some contexts (e.g., failure to lay before AGM across multiple years) so limitation and procedural issues depend on whether the act is continuing - [KISHAN PRASAD PALAYPU, S/O. P. SAMBAIAH VS REGISTRAR OF COMPANIES, HYDERABAD - 2006 0 Supreme(AP) 1412], [BENGAL LUXMI COTTON MILLS LTD. VS STATE - 1964 0 Supreme(Cal) 214], [Dulal Chandra Bhar VS STATE OF WEST BENGAL - 1961 0 Supreme(Cal) 50]
"Defences – Reasonable cause" - If reasons beyond control prevent holding AGM and laying accounts, directors may raise a defence; the court may examine whether such grounds foreclose liability for the particular year - [Public Prosecutor VS H. R. Basava Raj - 1962 0 Supreme(AP) 221]
"Judicial approach to ‘just and equitable’ winding up vs. 210 offences" - Winding-up powers under Section 433 and the related relief provisions (e.g., Section 633) operate separately from 210 offences; distinct reliefs apply for mismanagement vs. statutory non-compliance - [HARISH BANSAL VS MOTI FILMS PRIVATE LIMITED - 1983 0 Supreme(Del) 237], [Sanjay Modi VS Register of Companies, Jaipur - 1992 0 Supreme(Raj) 582]
"Remedies and relief" - Courts may grant relief from liability under Section 633(2) where sick/closed status or appeals are involved, and direct compliance within a time-frame; relief is discretionary and fact-specific - [Sanjay Modi VS Register of Companies, Jaipur - 1992 0 Supreme(Raj) 582]
"Prosecution against retiring directors" - If a director has ceased prior to the alleged default, proceedings against them can be quashed, subject to records showing cessation and lawful notices - [D. B. Negandhi VS Registrar of Companies - 2017 7 Supreme 385], [D. B. Negandhi VS Registrar of Companies - 2017 7 Supreme 385] (paras cited)
"Balance-sheet as admission" - A balance-sheet entry can amount to an admission of liability for limitation purposes under the Indian Limitation Act; such entries can impact limitation and support or undermine prosecutions - [ASSET RECONSTRUCTION COMPANY (INDIA) LIMITED VS BISHAL JAISWAL - 2021 3 Supreme 569], [Hindusthan Copper Ltd VS Integral Construction Company India - 2012 0 Supreme(Cal) 750]
"Balance-sheet – format and signing" - Balance-sheets must be signed by the directors/secretary and laid before AGM per Schedule VI; improper signing or non-compliance with form can affect culpability; proper signing schedules are key to forming a valid record - [KISHAN PRASAD PALAYPU, S/O. P. SAMBAIAH VS REGISTRAR OF COMPANIES, HYDERABAD - 2006 0 Supreme(AP) 1412], [M. D. MUNDHRA VS ASSISTANT REGISTRAR OF COMPANIES - 1978 0 Supreme(Cal) 636]
"Defect in cognizance" - Courts sometimes hold cognizance invalid if the complaint misinterprets the statutory time frame for the AGM or misstates the period; there must be correct application of Section 166(1) and 210(1)/(3) - [BIJOY KUMAR KARNANI VS ASSISTANT REGISTRAR OF COMPANIES, WET BENGAL - 1984 0 Supreme(Cal) 328], [SANATAN GANGULY VS STATE OF WEST BENGOL - 1984 0 Supreme(Cal) 90]
"Continuing obligation and limitation interplay" - Where the act constitutes a continuing default (e.g., ongoing failure to file over multiple years), the limitation regime may be governed by Section 472 CrPC and 468 CrPC depending on jurisdictional readings; some tribunals have treated 210 violations as continuing offences - [KISHAN PRASAD PALAYPU, S/O. P. SAMBAIAH VS REGISTRAR OF COMPANIES, HYDERABAD - 2006 0 Supreme(AP) 1412], [Public Prosecutor VS H. R. Basava Raj - 1962 0 Supreme(AP) 221]
"Relief through compounding / tribunal orders" - Tribunals can compound offences under 210 with conditions; the court must ensure compliance with both the statutory regime and the 2013 Act amendments when applying compounding, including consideration of minimum/maximum fines and period-specific penalties - [Viavi Solutions India Private Limited VS Registrar of Companies, NCT Delhi and Haryana - 2017 0 Supreme(NCLAT) 332], [BEJOY KUMAR KARNANI VS ASSISTANT REGISTRAR OF COMPANIES - 1984 0 Supreme(Cal) 329]
"Admissibility of circulars from regulatory bodies" - Court may accept regulatory circulars (e.g., Company Law Board directions) as valid defence to prosecutorial actions under 210 when they properly explained adjournment or other compliance; not universally binding but persuasive in appropriate contexts - [M. D. MUNDHRA VS ASSISTANT REGISTRAR OF COMPANIES - 1978 0 Supreme(Cal) 636], [SUDHIR KUMAR SEAL VS ASSISTANT REGISTRAR OF COMPANIES - 1978 0 Supreme(Cal) 502]
"Evidence and due process in enquiry under 633" - Enquiry under Section 633(1) must be conducted per CrPC, using trial evidence; relief should be granted only upon evaluation of evidence taking into account honesty and circumstances - [SANATAN GANGULY VS STATE OF WEST BENGOL - 1984 0 Supreme(Cal) 90]
"Judicial stance on ‘just and equitable’ relief vs. statutory penalties" - Courts emphasize prompt resolution of oppression/misconduct via 397/398 while acknowledging 210 offences; ensuring balance between avoiding unnecessary litigation and enforcing statutory duties - [Sanjay Modi VS Register of Companies, Jaipur - 1992 0 Supreme(Raj) 582], [OFFICIAL LIQUIDATOR OF R. S. MOTORS PRIVATE LIMITED VS JAGJIT SINGH SAWHNEY - 1973 0 Supreme(Del) 226]
"Relief to resigned/non-serving directors" - Courts have treated non-responsibility for post-resignation periods favorably in quashing 210 proceedings against those directors who are not in office at the relevant time - [Krishan kumar khemka VS Registrar of Companies, West Bengal - Crimes (1986)], [D. B. Negandhi VS Registrar of Companies - 2017 7 Supreme 385]
"Acquittal vs. conviction guidance" - Appeals against acquittals under 417(3) require special leave; some decisions emphasize that acquittals can be maintained if proper procedural routes were followed, while others allow for revisiting with proper leave - [Assistant Registrar Of Companies, W. B. VS Standard Paint Works Private LTD. - 1971 0 Supreme(SC) 161], [HARISH BANSAL VS MOTI FILMS PRIVATE LIMITED - 1983 0 Supreme(Del) 237]
"Interpretation of 'being wound up' in other Acts" - In related statutes (e.g., Displaced Persons (Debts Adjustment) Act), the phrase “being wound up” may differ in scope from Companies Act 1956; interpretive distinctions are important for maintainability of petitions under cross-legislation contexts - [A. C. Goel VS First National Bank Ltd. , Delhi - 1960 0 Supreme(P&H) 75]
"Two-tier accountability of directors" - Courts consistently hold directors liable for failure to lay accounts, while also considering reliefs where directors have resigned or where management turnover (e.g., RIICO handover) affects liability; balance between accountability and practicalities of governance is evident - [Sanjay Modi VS Register of Companies, Jaipur - 1992 0 Supreme(Raj) 582], [Kilpest Private Ltd. VS Shekhar Mehra - 1985 0 Supreme(MP) 70]
Note: The bullet points above synthesize core themes and outcomes drawn from the provided sources. Where specific details were not present in the sources, no extrapolated point has been added. References are indicated in square brackets after each point.
(1) The Central Government may, by notification in the Official Gazette, constitute an Advisory Committee to be called the National Advisory Committee on Accounting Standards (hereafter in this section referred to as the “Advisory Committee”) to advise the Central Government on the formulation and laying down of accounting standards for adoption by companies or class of companies under this Act.
(2) The Advisory Committee shall consist of the following members, namely:—
(a) a Chairperson who shall be a person of eminence and well versed in accountancy, finance, business administration, business law, economics or similar discipline;
(b) one member each nominated by the Institute of Chartered Accountants of India constituted under the Chartered Accountants Act
1[(1) Every balance-sheet of a company shall give a true and fair view of the state of affairs of the company as at the end of the financial year and shall, subject to the provisions of this section, be in the form set out in Part I of Schedule VI, or as near thereto as circumstances admit or in such order form as may be approved by the Central Government either generally or in any particular case; and in preparing the balance-sheet due regard shall be had, as far as may be, to the general instructions for preparation of balance-sheet under the heading “Notes“ at the end of that Part:
Provided that nothing contained in this sub-section shall apply to any insurance or banking company or any company engaged in the generation or supply of electricity or to any other class of company for which a form of balance-sheet has been specified in or under the Act governing such class of compan
Legal Comments- "Section 211(7) – Punishment scope" - Section 211(7) provides punishment by imprisonment, fine, or both; compounding may be done by Company Law Board or court in seisin; prior court permission not always required for compounding. [V. L. S. Finance Ltd. VS Union of India - 2013 4 Supreme 95]- "Continued offence vs limitation" - Courts have analyzed limitation and condonation in respect of offences under Sec 211(7); continuing/offence and delay condonation can affect cognizance, with remands for condonation applications. [Ramesh Chandra Sharma VS Egistrar of Companies, NCT of Delhi and Haryana - 2022 0 Supreme(Del) 491]- "Limitation clock start" - Limitation often runs from date of knowledge/inspection or from reporting authorities; delay beyond period may require condonation under CrPC 473 or Limitation Act, with quashing if barred. [NALCO VS REGISTRAR OF COMPANIES - 2003 0 Supreme(Ori) 675]- "Sanction for prosecution – Section 197 Cr.P.C." - Sanction under Section 197 is not automatically applicable to all public servants; lack of sanction can vitiate prosecution; many petitions hold sanction essential where required. [PRADIP KUMAR KHAITAN VS REGISTRAR OF COMPANIES, ORISSA. - 2011 0 Supreme(Ori) 538]- "Cognizance without sanction—quashing possible" - If prosecution is filed without proper sanction or beyond limitation, cognizance can be quashed; lack of authorization vitiates proceedings. [S. Gopalakrishnan VS State of Telangana - 2022 0 Supreme(Telangana) 19]- "Balance sheet disclosures under 211 – Registrar as aggrieved" - Registrar can file complaints under 211; not all directors/officers are automatically liable; liability depends on compliance and who was responsible. [SANJAY SURI VS STATE - 2010 0 Supreme(Del) 92]- "Accounting standards – AS-22/AS-14 interplay with 211" - Deviations from accounting standards may be excused if honest; however, disclosure requirements (AS 5/AS 22 scenarios) influence liability and potential quashing of prosecutions. [DEBA PRASAD ROY VS REGIONAL DIRECTOR, DEPARTMENT OF COMPANY AFFAIRS - 2007 0 Supreme(Cal) 365], [Ai Champdany Industries Limited VS Duncan International (I) Limited - 2012 0 Supreme(Cal) 136]- "Revaluation and 211 scope" - Asset revaluation is treated as accounting process under 211; does not necessarily fall under Company Court’s approval; sanction of scheme may include modifications. [In The Matter Of :- VS . - 2010 0 Supreme(P&H) 2674]- "Scheme of arrangement – sanction with accounting disclosures" - Schemes sanctioned with modifications may rely on disclosures under 211(3B) and related sections; deviations from standards may be permissible if supported by affidavits and just and reasonable conduct. [In Re: Sasken Communication Technologies Ltd. VS . - 2010 0 Supreme(Kar) 1152]- "Quashing for lack of proper authorization" - Courts have quashed proceedings where authorization to prosecute (e.g., by regulator) was not properly obtained. [S. Gopalakrishnan VS State of Telangana - 2022 0 Supreme(Telangana) 19]- "Continuing offence doctrine" - Some judgments treat 211 offences as continuing; however, courts differ on whether limitation runs anew; condonation filings may revive or sustain proceedings. [Ramesh Chandra Sharma VS Egistrar of Companies, NCT of Delhi and Haryana - 2022 0 Supreme(Del) 491], [02100131673]- "Admissibility of documents in balance sheet context" - Admissions in balance sheets or notes can constitute admissions of liability; but not always determinative for tax/IT or criminal liability; context matters. [Uttam Polypacks VS Bank of Rajasthan - Dishonour Of Cheque (2009)], [Uttam Polypacks Pvt. Ltd. VS Bank of Rajasthan Ltd. - Current Civil Cases (2009)]- "Bail standards in economic offences" - Courts impose stringent conditions for bail in SFIO/Companies Act offences; twin conditions of 212(6) in 2013 Act require careful demonstration of unlikely guilt and risk mitigation; general presumption of innocence persists. [Ashish Pandit VS State (NCT) of Delhi - Delhi (2014)], [Sujay U. Desai VS Serious Fraud Investigation Office - 2022 0 Supreme(All) 150], [Arun Kumar Aggarwal VS Serious Fraud Investigation Office - 2023 0 Supreme(Del) 4254]- "Compounding powers under Company Law Board" - CLB can compound offences under 211(7) before/after initiation of prosecutions; prior court permission not always necessary for compounding. [V. L. S. Finance Ltd. VS Union of India - 2013 4 Supreme 95]- "Purpose of 211 in accounting acts" - 211 governs form/contents of balance sheets and P&L its interaction with SS/AS is central to determining true/false disclosure and potential liability. [CLS Limited VS Union of India - 2016 0 Supreme(Cal) 896], [In the matter of: Bhagawati Foods (P) Limited VS Registrar of Companies, West Bengal - 2008 0 Supreme(Cal) 143]- "Crown/Registrar as aggrieved party" - Registrar can be a 'person aggrieved' for purposes of 211 prosecutions; not necessarily every director/officer; structure of liability depends on compliance. [SANJAY SURI VS STATE - 2010 0 Supreme(Del) 92]- "Accounting standards override in 211(3B)/(3C)" - ICAI accounting standards may override or fill gaps when Central Government standards are not yet prescribed; deviations must be disclosed with rationale and effect. [Commissioner of Income Tax-VI VS Virtual Soft Systems Ltd. - 2018 4 Supreme 315], [Prabhat Kumar Srivastava VS Serious Fraud Investigation Office - 2021 0 Supreme(Del) 2314]- "Asset revaluation not needing Company Court approval" - Unilateral accounting action (revaluation) can be permissible under 211; company scheme approvals may still be necessary for broader restructurings. [In The Matter Of :- VS . - 2010 0 Supreme(P&H) 2674]- "Contested sanctions under 197 CrPC – distinction between public servants" - Not all public servants receive Section 197 protection; removable officers are not protected without government sanction; applies to certain roles under 211. [PRADIP KUMAR KHAITAN VS REGISTRAR OF COMPANIES, ORISSA. - 2011 0 Supreme(Ori) 538], [Mohammad Wajid VS State Of U. P. - 2019 0 Supreme(All) 607]- "Admissibility of show-cause notices – scope of 211" - Show-cause notices adjudicated to determine whether alleged violations truly merit prosecution; some notices are quashed if lacking substantiation or proper legal basis. [SIMPLEX CONCRETE PILES (INDIA) LTD. VS UNION OF INDIA - 2007 0 Supreme(Cal) 301]- "Banking/Insurance exemptions under 211" - Certain sectors (banking, insurance, electricity) may be exempt from certain 211 formatting requirements; subsequent statutory amendments may harmonize or modify these exemptions. [Gopal Jalan VS Calcutta Stock Ex Change Association Ltd - 1959 0 Supreme(Cal) 183], [K. K. Nag Ltd. VS Additional Commissioner of Income-tax, Range-9, Pune - Income Tax Appellate Tribunal (2012)]- "Winding up and 211 disclosures" - 211/disclosures influence corporate actions (e.g., winding up, scheme approvals) where true/false positions affect creditors/stakeholders; courts emphasize accounting transparency. [Uttam Polypacks VS Bank of Rajasthan - Dishonour Of Cheque (2009)], [00500005400]
Notes:- The above points synthesize key themes and references from the provided sources, formatted as bullet points with concise summaries and source citations in square brackets. Where a topic lacked explicit information in the supplied sources, it was omitted per instruction.
(1) There shall be attached to the balance-sheet of a holding company having a subsidiary or subsidiaries at the end of the financial year as at which the holding company’s balance-sheet is made out, the following documents in respect of such subsidiary or of each such subsidiary, as the case may be:—
(a) a copy of the balance-sheet of the subsidiary;
(b) a copy of its profit and loss account;
(c) a copy of the report of its Board of directors;
(d) a copy of the report of its auditors;
(e) a statement of the holding company’s interest in the subsidiary as specified in sub-section (3);
(f) the statement referred to in sub-section (5), if any; a
(1) Where it appears to the Central Government desirable for a holding company or a holding company’s subsidiary, to extend its financial year so that the subsidiary’s financial year may end with that of the holding company, and for that purpose to postpone the submission of the relevant accounts to a general meeting, the Central Government may, on the application or with the consent of the Board of directors of the company whose financial year is to be extended, direct that in the case of that company, the submission of accounts to a general meeting, the holding of an annual general meeting or the making of an annual return, shall not be required to be submitted, held or made, earlier than the dates specified in the direction, notwithstanding anything to the contrary in this Act or in any other Act for the time being in force.
(2) The Central Government shall, on the application o
(1) A holding company may, by resolution, authorise representatives named in the resolution to inspect the books of account kept by any of its subsidiaries; and the books of account of any such subsidiary shall be open to inspection by those representatives at any time during business hours.
(2) The rights conferred by section 235 upon members of a company may be exercised, in respect of any subsidiary, by members of the holding company as if they alone were members of the subsidiary.
(1) Save as provided by sub-section (2), every balance-sheet and every profit and loss account of a company shall be signed on behalf of the Board of directors—
(i) in the case of banking company, by the persons specified in clause (a) or clause (b), as the case may be, of sub-section (2) of section 29 of the Banking Companies Act, 1949 (10 of 1949);
(ii) in the case of any other company, by its 1[***] manager or secretary, if any, and by not less than two directors of the company one of whom shall be a managing director where there is one.
(2) In the case of a company not being a banking company, when only one of its directors is for the time being in India, the balance-sheet and the profit and loss account shall be signed by such director; but in such a case there shall be attached to
The profit and loss account shall be annexed to the balance-sheet and the auditors’ report 1[(including the auditors’ separate, special or supplementary report, if any)] shall be attached thereto.
-----------------------------
1. Ins. by Act 65 of 1960, sec. 64 (w.e.f. 28-12-1960).
-----------------------------
(1) There shall be attached to every balance-sheet laid before a company in general meeting, a report by its Board of directors, with respect to—
(a) the state of the company’s affairs;
(b) the amounts, if any, which it proposes to carry to any reserves 1[***] in such balance-sheet 2[***]
(c) the amount, if any, which it recommends should be paid by way of dividend;
3[(d) material changes and commitments, if any; affecting the financial position of the company which have occurred between the end of the financial year of the company to which the balance-sheet relates and the date of report;]
4[(e) the conservation of energy, technology absorption, foreign exchange earnings and outgo, in such
(a) If any copy of a balance-sheet or profit and loss account which has not been signed as required by section 215 is issued, circulated or published; or
(b) If any copy of a balance-sheet is issued, circulated or published without there being annexed or attached thereto, as the case may be, a copy each of (i) the profit and loss account, (ii) any accounts, reports or statements which, by virtue of section 212, are required to be attached to the balance-sheet, (iii) the auditors’ report, and (iv) the Board’s report referred to in section 217;
the company, and every officer of the company who is in default, shall be punishable with fine which may extend to 1[five thousand rupees].
------------------------------
1. Subs. by Act 53 of 2000, sec.
(1) A copy of every balance-sheet (including the profit and loss account, the auditors’ report and every other document required by law to be annexed or attached, as the case may be, to the balance-sheet) which is to be laid before a company in general meeting shall, not less than twenty-one days before the date of the meeting, be sent to every member of the company, 1[to every trustee for the holders of any debentures issued by the company, whether such member or trustee is or is not entitled to have notices of general meetings of the company sent to him, and to all persons other than such members or trustees, being persons so entitled]:
Provided that—
(a) in the case of a company not having a share capital, this sub-section shall not require the sending of a copy of the documents aforesaid to a member, or holder of debentures, of th
(1) After the balance-sheet and the profit and loss account have been laid before a company at an annual general meeting as aforesaid, there shall be filed with the Registrar 1[within thirty days from the date on which the balance-sheet and the profit and loss account were so laid] 2[or where the annual general meeting of a company for any year has not been held, there shall be filed with the Registrar within thirty days from the latest day on or before which that meeting should have been held in accordance with the provisions of this Act].
(a) 3[***] three copies of the balance-sheet and the profit and loss account signed by the managing director, 4[***] manager or secretary of the company, or if there be none of these, by a director of the company, together with three copies of all documents which are required by this Act to be annexed or attended to such balance-sheet or profit
(1) Where any particulars or information is required to be given in the balance-sheet or profit and loss account of a company or in any document required to be annexed or attached thereto, it shall be the duty of the concerned officer of the company to furnish without delay to the company, and also to the company’s auditor whenever he so requires, those particulars or that information in as full a manner as possible.
1[***]
(3) The particulars or information referred to in sub-section (1) may, relate to payments made to any director, 2[***] or other person by any other company, body corporate, firm or person.
(4) If any person knowingly makes default in performing the duty cast on him by the foregoing provisions of this section, he shall be punishable with imprisonment which may extend to six
References in this Act to documents annexed or required to be annexed to a company’s accounts or any of them shall not include the Board’s report, the auditors’ report or any document attached or required to be attached to those accounts:
Provided that any information which is required by this Act to be given in the accounts, and is allowed by it to be given in a statement annexed to the accounts, may be given in the Board’s report instead of in the accounts; and if any such information is so given, the report shall be annexed to the accounts and this Act shall apply in relation thereto accordingly, except that the auditors shall report thereon only insofar as it gives the said information.
(1) Every company which is a limited banking company, an insurance company or a deposit, provident or benefit society, shall, before it commences business and also on the first Monday in February and the first Monday in August in every year during which it carries on business, make a statement in the Form in Table F in Schedule I, or in a Form as near thereto as circumstances admit.t
(2) A copy of the statement, together with a copy of the last audited balance-sheet laid before the members of the company, shall be displayed and until the display of the next following statement, shall be kept displayed, in a conspicuous place in the registered office of the company, and in every branch office or place where the business of the company is carried on.
(3) Every member and every creditor, of the company shall be entitled, on payment of a sum
1[(1) Every company shall, at each annual general meeting, appoint an auditor or auditors to hold office from the conclusion of that meeting until the conclusion of the next annual general meeting and shall, within seven days of the appointment, give intimation thereof to every auditor so appointed 2[***]:
3[Provided that before any appointment or re-appointment of auditor or auditors is made by any company at any annual general meeting a written certificate shall be obtained by the company from the auditor or auditors proposed to be so appointed to the effect that the appointment or re-appointment, if made, will be in accordance with the limits specified in sub-section (1B).]
(1A) Every auditor appointed under sub-section (1), 2[***] shall within thirty days of the receipt from the company of the intimation of his appointment, inform th
(1) In the case of a company in which not less than twenty-five per cent of the subscribed share capital is held, whether singly or in any combination, by—
(a) a public financial institution or a Government company or Central Government or any State Government, or
(b) any financial or other institution established by any Provincial or State Act in which a State Government holds not less than fifty-one per cent of the subscribed share capital, or
(c) a nationalised bank or an insurance company carrying on general insurance business,
the appointment or re-appointment at each annual general meeting of an auditor or auditors shall be made by a special resolution.
(2) Where any company referred to in
(1) Special notice shall be required for a resolution at an annual general meeting appointing as auditor a person other than a retiring auditor, or providing expressly that a retiring auditor shall not be re-appointed.
(2) On receipt of notice of such a resolution, the company shall forthwith send a copy thereof to the retiring auditor.
(3) Where notice is given of such a resolution and the retiring auditor makes with respect thereto representations in writing to the company (not exceeding a reasonable length) and requests their notification to members of the company, the company shall, unless the representations are received by it too late for it to do so,—
(a) in any notice of the resolution given to members of the company, state the fact of the representations having been made; and
&
(1) A person shall not be qualified for appointment as auditor of a company unless he is a chartered accountant within the meaning of the Chartered Accountants Act, 1949 (38 of 1949):
Provided that a firm whereof all the partners practising in India are qualified for appointment as aforesaid may be appointed by its firm name to be auditor of a company, in which case any partner so practising may act in the name of the firm.
(2) (a) Notwithstanding anything contained in sub-section (1) but subject to the provisions of any rules made under clause (b), the holder of a certificate granted under a law in force in the whole or any portion of a Part B State immediately before the commencement of the Part B States (Laws) Act, 1951 (3 of 1951) 1[or of the Jammu and Kashmir (Extension of Laws) Act, 1956 (62 of 1956) as the case may be,] entitling
(1) Every Auditor of a company shall have a right of access at all times to the books and accounts and vouchers of the company, whether kept at the head office of the company or elsewhere, and shall be entitled to require from the officers of the company such information and explanations as the auditor may think necessary for the performance of his duties as auditor.
(1A) Without prejudice to the provisions of sub-section (1), the auditor shall inquire:
(a) Whether loans and advances made by the company on the basis of security have been properly secured and whether the terms on which they have been made are not prejudicial to the interests of the company or its members.
(b) Whether transactions of the company which are represented merely by book entries are not prejudicial to the interests of
(1) Where a company has a branch office, the accounts of that office shall, 1[be audited by the company’s auditor appointed under section 224 or] by a person qualified for appointment as auditor of the company under section 226, or where the branch office is situate in a country outside India, either 2[by the company’s auditor or a person qualified as aforesaid] or by an accountant duly qualified to act as an auditor of the accounts of the branch office in accordance with the laws of that country.
(2) Where the accounts of any branch office are 3[audited by a person other than the company’s auditor] the company’s auditor—
(a) shall be entitled to visit the branch office, if he deems it necessary to do so for the performance of has duties as auditor, and
(b) shall have a right of access a
Only the person appointed as auditor of the company, or where a firm is so appointed in pursuance of the proviso to sub-section (1) of section 226, only a partner in the firm practising in India, may sign the auditor’s report, or sign or authenticate any other document of the company required by law to be signed or authenticated by the auditor.
The auditor’s report shall be read before the company in general meeting and shall be open to inspection by any member of the company.
All notices of any other communications relating to, any general meeting of a company which any member of the company is entitled to have sent to him shall also be forwarded to the auditor of the company; and the auditor shall be entitled to attend any general meeting and to be heard at any general meeting which he attends on any part of the business which concerns him as auditor.
If default is made by a company in complying with any of the provisions contained in sections 225 to 231, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to 1[five thousand rupees].
-------------------------------
1. Subs. by Act 53 of 2000, sec. 110, for “five hundred rupees” (w.e.f. 13-12-2000).
-------------------------------
If any auditor’s report is made, or any document of the company is signed or authenticated, otherwise than in conformity with the requirements of sections 227 and 229, the auditor concerned, and the person, if any, other than the auditor who signs the report or signs or authenticates the document, shall, if the default is wilful, be punishable with fine which may extend to 1[ten thousand rupees].
-------------------------------
1. Subs. by Act 53 of 2000, sec. 111, for “one thousand rupees” (w.e.f. 13-12-2000).
(1) Where in the opinion of the Central Government it is necessary so to do in relation to any company required under clause (d) of sub-section (1) of section 209 to include in its books of account the particulars referred to therein, the Central Government may, by order, direct that an audit of cost accounts of the company shall be conducted in such manner as may be specified in the order by an auditor 2[who shall be a cost accountant within the meaning of the Cost and Work Accountants Act, 1959 (23 of 1959):
Provided that if the Central Government is of opinion that sufficient number of cost accountants within the meaning of the Cost and Works Accountants Act, 1959 (23 of 1959), are not available for conducing the audit of the cost accounts of companies generally, that Government may, by notification in the Official Gazette, direct that, for such period as may be specified in the
(1) Where, on perusing any document which a company is required to submit to him under this Act, the Registrar is of opinion that any information or explanation is necessary 1 [with respect to any matter to which such document] purports to relate, he may, by a written order call on the company submitting the document to furnish in writing such information or explanation, within such time as he may specify in the order.
(2) On receipt by the company of an order under sub-section (1), it shall be the duty of the company, and of all persons who are officers of the company, to furnish such information or explanation to the best of their power.
(3) On receipt of a copy of an order under sub-section (1), it shall also be the duty of every person who has been an officer of the company to furnish such information or explanation to the best of
(1) Where, upon information in his possession or otherwise, the Registrar has reasonable ground to believe that books and papers of, or relating to, any company or other body corporate, or 2[***] managing director or manager of such company or other body corporate, 3[***] may be destroyed, mutilated, altered, falsified or secreted, the Registrar may make an application 4[***] to the Magistrate of the First Class or, as the case may be, the Presidency Magistrate having jurisdiction for an order for the seizure of such books and papers.
(2) After considering the application and hearing the Registrar, if necessary, the 5[Magistrate] may, by order, authorise the Registrar—
(a) to enter, with such assistance as may be required, the place or places where such books and papers are kept;
(b) to
(1) The Central Government may, where a report has been made by the Registrar under sub-section (6) of section 234, or under sub-section (7) of that section, read with sub-section (6) thereof, appoint one or more competent persons as inspectors to investigate the affairs of a company and to report thereon in such manner as the Central Government may direct.
(2) Where—
(a) in the case of a company having a share capital, an application has been received from not less then two hundred members or from members holding not less than one-tenth of the total voting power therein, and
(b) in the case of a company having no share capital, an application has been received from not less than one-fifth of the persons on the company’s register of members,
An application by members of a company 1[under sub-section (2) of section 235] shall be supported by such evidence as the 2[3[Tribunal] may require] for the purpose of showing that the applicants have good reason for requiring the investigation; and the Central Government may, before appointing an inspector, require the applicants to give security, for such amount not exceeding one thousand rupees as it may think fit, for payment of the costs of the investigation.
----------------------------------
1. Subs. by Act 31 of 1988, sec. 37, for “under clause (a) or (b) of section 235” (w.e.f. 31-5-1991).
2. Subs. by Act 31 of 1988, sec. 37, for “Central Government may require” (w.e.f. 31-5-1991).
&nbs
(a) shall appoint one or more competent persons as inspectors to investigate the affairs of a company and to report thereon in such manner as the Central Government may direct, if—
(i) the company, by special resolution; or
(ii) the Court, by order,
declares that the affairs of the company ought to be investigated by an inspection appointed by the Central Government; and
(b) may do so 1[in its opinion or in the opinion of the Tribunal] there are circumstances suggesting—
(i) that the business of the company is being conducted with intent to defraud its creditors, members or any other persons, or otherwise for a fraudulent or unlawful purpose, or in a manner oppressive of any of its members,
No firm, body corporate or other association shall be appointed as an inspector under section 235 or 237.
(1) If an inspector appointed under section 235 or 237 to investigate the affairs of a company thinks it necessary for the purposes of his investigation to investigate also the affairs of—
(a) any other body corporate which is, or has at any relevant time been the company’s subsidiary or holding company, or a subsidiary of its holding company, or a holding company of its subsidiary;
2[(b) any other body corporate which is, or has at any relevant time been managed by any person as managing director or as manager, who is, or was, at the relevant time, the managing director or the manager of the company; or]
(c) any other body corporate which is, or has at any relevant time been, managed by the company or whose Board of directors comprises of nominees of the company or is accustomed to a
1 [(1) It shall be the duty of all officers and other employees and agents of the company, and where the affairs of any other body corporate are investigated by virtue of section 239, of all officers and other employees and agents of such body corporate—
(a) to preserve and to produce to an inspector or any person authorised by him in this behalf with the previous approval of the Central Government, all books and papers of, or relating to, the company or, as the case may be, or of relating to the other body corporate, which are in their custody or power; and
(b) otherwise to give to the inspector all assistance in connection with the investigation which they are reasonably able to give.]
2 [(1A) The inspector may, with the previous approval of the Central Government, require any body corpor
(1) Where in the course of investigation under section 235 or section 237 or section 239 or section 247, the inspector has reasonable ground to believe that the books and papers of, or relating to, any company or other body corporate or 2[***] managing director or manager of such company or other body corporate, 3[***] may be destroyed, mutilated, altered, falsified or secreted, the inspector may make an application 4[***] to the Magistrate of the First Class or, as the case may be, the Presidency Magistrate, having jurisdiction for an order for the seizure of such books and papers.
(2) After considering the application and hearing the inspector, if necessary, the 5[Magistrate] may by order authorise the inspector—
(a) to enter, with such assistance, as may be required, the place or places where such books and papers are kept;
&nbs
(1) The inspectors may, and if so directed by the Central Government shall, make interim reports to that Government, and on the conclusion of the investigation shall make a final report to the Central Government.
Any such report shall be written or printed, as the Central Government may direct.
(2) The Central Government—
(a) shall forward a copy of any report 1[(other than an interim report)] made by the inspectors to the company at its registered office, and also to any body corporate 2[***] dealt with in the report by virtue of section 239;
(b) may, if it thinks fit, furnish a copy thereof, on request and on payment of the prescribed fee, to any person—
3[(i) who is a member of the company or
(1) If, from any report made under section 241, it appears to the Central Government that any person has, in relation to the company or in relation to any other body corporate, 1[***] whose affairs have been investigated by virtue of section 239, been guilty of any offence for which he is criminally liable, the Central Government may, after taking such legal advice as it thinks fit, prosecute such person for the offence and it shall be the duty of 2[all officers and other employees] and 3[agents of the company, or body corporate,] (other than the accused in the proceedings), to give the Central Government all assistance in connection with the prosecution which they are reasonably able to give.
(2) Sub-section (6) of section 240 shall apply for the purposes of this section, as it applies for the purposes of that section.
If any such company or other body corporate 1[***] is liable to be wound up under this Act and it appears to the Central Government from any such report as aforesaid that it is expedient so to do by reason of any such circumstances as are referred to in sub-clause (i) or (ii) of clause (b) of section 237, the Central Government may, unless 2[the company or body corporate,] is already being wound up by the 3[Tribunal] , cause to be presented to the 3[Tribunal] by any person authorised by the Central Government in this behalf—
(a) a petition for the winding up of 2[the company or body corporate,] on the ground that it is just and equitable that it should be wound up;
(b) an application for an order under section 397 or 398;
(c) both a petition and an application as aforesaid.
&
(1) If from any such report as aforesaid, it appears to the Central Government that proceedings ought, in the public interest, to be brought by the company or any body corporate whose affairs have been investigated in pursuance of clauses (a), (b) or (c) of section 239,—
(a) for the recovery of damages in respect of any fraud, misfeasance or other misconduct in connection with the promotion or formation, or the management of the affairs, of such company or body corporate; or
(b) for the recovery of any property of such company, or body corporate, which has been misapplied or wrongfully retained,
the Central Government may itself bring proceedings for that purpose in the name of such company or body corporate.
(2) The Central Government shall i
(1) The expenses of and incidental to an investigation by an inspector appointed by the Central Government under section 235 or 237 shall be defrayed in the first instance by the Central Government; but the following persons shall, to the extent mentioned below, be liable to reimburse the Central Government in respect of such expenses:—
(a) any person who is convicted on a prosecution instituted in pursuance of section 242, or who is ordered to pay damages or restore any property in proceedings brought by virtue of section 244, may, in the same proceedings, be ordered to pay the said expenses to such extent as may be specified by the Court convicting such person, or ordering him to pay such damages or restore such property as the case may be;
(b) any company or body corporate in whose name proceedings are brought as aforesaid shall
A copy of any report of any inspector or inspectors appointed under section 235 or 237 authenticated in such manner, of any, as may be prescribed, shall be admissible in any legal proceeding as evidence of the opinion of the inspector or inspectors in relation to any matter contained in the report.
(1) Where it appears to the Central Government that there is good reason so to do it may appoint one or more inspectors to investigate and report on the membership of any company and other matters relating to the company, for the purpose of determining the true persons—
(a) who are or have been financially interested in the success or failure, whether real or apparent, of the company; or
(b) who are or have been able to control or materially to influence the policy of the company.
1[(1A) Without prejudice to its powers under this section, the Central Government shall appoint one or more inspectors under sub-section (1), if the 2[Tribunal] in the course of any proceedings before it, declares by an order that the affairs of the company ought to be investigated as regards the membership of
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 124 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 124 (w.e.f. 13-12-2000).]
(1) 2[Where it appears to the 3 [Tribunal], whether on a reference made to it by the Central Government in connection with any investigation under sections 247, 4 [***] or on a complaint made by any person in this behalf] that there is good reason to find out the relevant facts about any shares (whether issued or to be issued) and the 5 [Tribunal] is of the opinion that such facts cannot be found out unless the restrictions specified in sub-section (2) are imposed, the 5 [Tribunal] may, by order, direct that the shares shall be subject to the restrictions imposed by sub-section (2) for such period not exceeding three years as may be specified in the order.
(2) So long as any shares are directed to be subject to the restrictions imposed by this sub-section—
(a) any transfer of those shares shall be void;
&nbs
An investigation may be initiated under sections 235, 237, 239 2[or 247] notwithstanding that—
(a) an application has been made for an order under section 397 or section 398; or
(b) the company has passed a special resolution for voluntary winding up,
and no investigation so initiated shall be stopped or suspended by reason only of the fact that an application referred to in clause (a) has been made or a special resolution referred to in clause (b) has been passed.]
--------------------------
1. Ins. by Act 31 of 1965, sec. 28 (w.e.f. 15-10-1965).
2. Subs. by Act 53 of 2000, sec. 126, for “247,
Nothing in sections 1[234 to 247 and 250] shall require the disclosure to 2[3[Tribunal] or to the Central Government or to the Registrar or to an inspector appointed by Central Government]—
(a) by a legal adviser, of any privileged communication made to him in that capacity, except as respects the name and address of his client; or
(b) by the bankers of any company, body corporate 4[***] or other person, referred to in the sections aforesaid, as such bankers of any information as to the affairs of any of their customers other than such company, body corporate 4[***] or person.
-------------------------------
1. Subs. by Act 53 of 2000, sec. 127, for “234 to 250” (w.e.f. 13-12-2000).
&nbs
(1) Every 1[public company (other than a public company which has become such by virtue of section 43A)] 2[***] shall have at least three directors:
3[Provided that a public company having,—
(a) a paid-up capital of five crore rupees or more;
(b) one thousand or more small shareholders,
may have a director elected by such small shareholders in the manner as may be prescribed.
Explanation.—For the purpose of this sub-section “small shareholders” means a shreholder holding shares of nominal value of twenty thousand rupees or less in a public company to which this section applies.]
(2) Every 4[other] company 5[***] shall have at least two directors.
No body corporate, association or firm shall be appointed director of a 1[***] company, and only an individual shall be so appointed:
2[Provided that no company shall appoint or re-appoint any individual as director of the company unless he has been allotted a Director Identification Number under section 266B.]
-------------------------------------
1. The words “public or private” omitted by Act 65 of 1960, sec. 82 (w.e.f. 28-12-1960).
2. Ins. by Act 23 of 2006, sec. 2 (w.e.f. 1-11-2006).
-------------------------------------
In default of and subject to any regulations in the articles of a company, subscribers of the memorandum who are individuals, shall be deemed to be the directors of the company, until the directors are duly appointed in accordance with section 255.
(1) 1[Unless the articles provide for the retirement of all directors at every annual general meeting, not less than two-thirds] of the total number of directors of a public company, or of a private company which is a subsidiary of a public company, shall—
(a) be persons whose period of office is liable to determination by retirement of directors by rotation; and
(b) save as otherwise expressly provided in this Act, be appointed by the company in general meeting.
(2) The remaining directors in the case of any such company, and the directors generally in the case of a private company which is not a subsidiary of a public company, shall in default of and subject to any regulations in the articles of the company, also be appointed by the company in general meeting.
&nbs
(1) At the first annual general meeting of a public company, or a private company which is a subsidiary of a public company held next after the date of the general meeting at which the first directors are appointed in accordance with section 255 and at every subsequent annual general meeting, one-third of such of the directors for the time being as are liable to retire by rotation, or if their number is not three or a multiple of three, then, the number nearest to one-third, shall retire from office.
(2) The directors to retire by rotation at every annual general meeting shall be those who have been longest in office since their last appointment, but as between persons who became directors on the same day, those who are to retire shall, in default of and subject to any agreement among themselves, be determined by lot.
(3) At the annual g
(1) A person who is not a retiring director shall, subject to the provisions of this Act, be eligible for appointment to the office of director at any general meeting, if he or some member intending to propose him has, not less than fourteen days before the meeting, left at the office of the company a notice in writing under his hand signifying his candidature for the office of director or the intention of such member to propose him as a candidate for that office, as the case may be, 1[along with a deposit of five hundred rupees which shall be refunded to such person or, as the case may be, to such member, if the person succeeds in getting elected as a director].
2[(1A) The company shall inform its members of the candidature of a person for the office of director or the intention of a member to propose such person as a candidate for that office, by serving individual notices on the
1[***] Subject to the provisions of sections 252, 255 and 259, a company in general meeting may, by ordinary resolution, increase or reduce the number of its directors within the limits fixed in that behalf by its articles.
-----------------------------
1. The brackets and figure “(1)” omitted by Act 36 of 1957, sec. 3 and Sch. II.
-----------------------------
—In the case of a public company or a private company which is a subsidiary of a public company, any increase in the number of its directors, except—
(a) in the case of a company which was in existence on the 21st day of July, 1951, an increase which was within the permissible maximum under its articles as in force on that date, and
(b) in the case of a company which came or may come into existence after that date, an increase which is within the permissible maximum under its articles as first registered,
shall not have any effect unless approved by the Central Government; and shall become void if, and insofar as, it is disapproved by that Government:
1[Provided that where such permissible maximum is twelve or less than twelve, no approval of
Nothing in sections 255, 258 or 259 shall affect any power conferred on the Board of directors by the articles to appoint additional directors:
Provided that such additional directors shall hold office only up to the date of the next annual general meeting of the company:
Provided further that the number of the directors and additional directors together shall not exceed the maximum strength fixed for the Board by the articles.
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 129 (w.e.f. 13-12-2000).]
(1) In the case of a public company or a private company which is a subsidiary of a public company, if the office of any director appointed by the company in general meeting is vacated before his term of office will expire in the normal course, the resulting casual vacancy may, in default of and subject to any regulations in the articles of the company, be filled by the Board of directors at a meeting of the Board.
(2) Any person so appointed shall hold office only up to the date up to which the director in whose place he is appointed would have held office if it had not been vacated as aforesaid.
(1) At a general meeting of a public company or of a private company which is a subsidiary of a public company, a motion shall not be made for the appointment of two or more persons as directors of the company by a single resolution, unless a resolution that it shall be so made has first been agreed to by the meeting without any vote being given against it.
(2) A resolution moved in contravention of sub-section (1) shall be void, whether or not objection was taken at the time to its being so moved:
Provided that where a resolution so moved is passed, no provision for the automatic re-appointment of 1[the director retiring by rotation] in default of another appointment shall apply.
(3) For the purposes of this section, a motion for approving a person’s appointment, or for nominating a person fo
Nothing contained in sections 177, 255, 256 and 263 shall affect any provision in the articles of a company for the election by ballot of all its directors at each annual general meeting if such company does not carry on business for profit or prohibits the payment of a dividend to its members.]
----------------------------
1. Ins. by Act 65 of 1960, sec. 88 (w.e.f. 28-12-1960).
----------------------------
(1) Every person 2[other than a director retiring by rotation or otherwise or a person] who has left at the office of the company a notice under section 257 signifying his candidature for the office of a director) proposed as a candidate for the office of a director shall sign, and file with the company, his consent in writing to act as a director, if appointed.
3[(2) A person other than—
(a) a director re-appointed after retirement by rotation or immediately on the expiry of his term of office, or
(b) an additional or alternate director or a person filling a casual vacancy in the office of a director under section 262, appointed as a director or re-appointed as an additional or alternate director, immediately on the expiry of his term of office, or
Notwithstanding anything contained in this Act, the articles of a company may provide for the appointment of not less than two-thirds of the total number of the directors of a public company or of a private company which is a subsidiary of a public company, according to the principle of proportional representation, whether by the single transferable vote or by a system of cumulative voting or otherwise, the appointments being made once in every three years and interim casual vacancies being filled in accordance with the provisions, mutatis mutandis, of section 262.
(1) A person shall not be capable of being appointed director of a company by the articles, and shall not be named as a director or proposed director of a company in a prospectus issued by or on behalf of the company, or as proposed director of an intended company in a prospectus issued in relation to that intended company, or in a statement in lieu of prospectus filed with the Registrar by or on behalf of a company, unless, before the registration of the articles, the publication of the prospectus, or the filing of the statement in lieu of prospectus, as the case may be, he has, by himself or by his agent authorised in writing,—
(a) signed and filed with the Registrar a consent in writing to act as such director; and
(b) either—
(i) signed the memorandum for shares not being less in
(a) individual, intending to be appointed as director of a company; or
(b) director of a company appointed before the commencement of the Companies (Amendment) Act, 2006,
shall make an application for allotment of Director Identification Number to the Central Government in such form, and manner (including electronic form) alongwith such fee, as may be prescribed:
Provided that every director, appointed before the commencement of the Companies (Amendment) Act, 2006, shall make, within sixty days of the commencement of the said Act, such application to the Central Government:
Provided further that every applicant, who has made an application under this section for allotment of Director Identification Number, may be appointed as a director in a c
The Central Government shall, within one month from the receipt of the application under section 266 A, allot a Director Identification Number to an applicant, in such manner as may be prescribed.]
------------------
1. Ins. by Act 23 of 2006, sec. 3 (w.e.f. 1-11-2006).
No individual, who had already been allotted a Director Identification Number under section 266B, shall apply, obtain or possess another Director Identification Number.
------------------
1. Ins. by Act 23 of 2006, sec. 3 (w.e.f. 1-11-2006).
Every existing director shall, within one month of the receipt of Director Identification Number from the Central Government, intimate his Director Identification Number to the company or all companies wherein he is a director.]
------------------
1. Ins. by Act 23 of 2006, sec. 3 (w.e.f. 1-11-2006).
(1) Every company shall, within one week of the receipt of intimation under section 266D, furnish the Director Identification Number of all its directors to the Registrar or any other officer or authority as may be specified by the Central Government.
(2) Every intimation under sub-section (1) shall be furnished in such form and manner as may be prescribed.]
------------------
1. Ins. by Act 23 of 2006, sec. 3 (w.e.f. 1-11-2006).
Every person or company, while furnishing any return, information or particulars as are required to be furnished under this Act, shall quote the Director Identification Number in such return, information or particulars in case such return, information or particulars relate to the director or contain any reference of the director.]
------------------
1. Ins. by Act 23 of 2006, sec. 3 (w.e.f. 1-11-2006).
If any individual or director, referred to in section 266A or section 266C or section 266D or a company referred to in section 266E, contravenes any of the provisions of those sections, every such individual or director or the company, as the case may be, who or which, 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 the contravention continues.
Explanation.—For the purposes of sections 266A, 266B, 266C, 266D, 266E and 266F, the Director Identification Number means an identification number which the Central Government may allot to any individual, intending to be appointed as director or to any existing directors of a company, for the purpose of his identification as such.]
&n
No company shall, after the commencement of this Act, appoint or employ, or continue the appointment or employment of, any person as its managing or whole-time director who—
(a) is an undischarged insolvent, or has at any time been adjudged an insolvent;
(b) suspends, or has at any time suspended, payment to his creditors, or makes, or has at any time made, a composition with them; or
(c) is, or has at any time been, convicted by a Court 1[***] of an offence involving moral turpitude.
-----------------------------------
1. The words “in India” omitted by Act 65 of 1960, sec. 90 (w.e.f. 28-12-1960).<
In the case of a public company or a private company which is a subsidiary of a public company, an amendment of any provision relating to the appointment or re-appointment of a managing or whole-time director or of a director not liable to retire by rotation, whether that provision be contained in the company’s memorandum or articles, or in an agreement entered into by it or in any resolution passed by the company in general meeting or by its Board of directors, shall not have any effect unless approved by the Central Government; and the amendment shall become void if, and insofar as, it is disapproved by that Government.
(1) On and from the commencement of the Companies (Amendment) Act, 1988, every public company, or a private company which is a subsidiary of a public company, having a paid up share capital of such sum as may be prescribed, shall have a managing or whole-time director or a manager.
(2) On and from the commencement of the Companies (Amendment) Act, 1988, no appointment of a person as a managing or whole-time director or a manager in a public company or a private company which is a subsidiary of a public company shall be made except with the approval of the Central Government unless such appointment is made in accordance with the conditions specified in Parts I and II of Schedule XIII (the said Parts being subject to the provisions of Part III of that Schedule) and a return in the prescribed form is filed within ninety days from the date of such appointment.
&nbs
(1) Without prejudice to the restrictions imposed by section 266, it shall be the duty of every director who is required by the articles of the company to hold a specified share qualification and who is not already qualified in that respect, to obtain his qualification within two months after his appointment as director.
(2) Any provision in the articles of the company (whether made before or after the commencement of this Act) shall be void insofar as it requires a person to hold the qualification shares before his appointment as a director or to obtain them within a shorter time than two months after his appointment as such.
(3) The nominal value of the qualification shares shall not exceed five thousand rupees, or the nominal value of one share where it exceeds five thousand rupees.
(4) For
[Rep. by the Companies (Amendment) Act, 1965 (31 of 1965), sec. 34 (w.e.f. 15-10-1965).]
If, after the expiry of the said period of two months, any person acts as a director of the company when he does not hold the qualification shares referred to in section 270, he shall be punishable with fine which may extend to 1[five hundred rupees] for every day between such expiry and the last day on which he acted as a director.
--------------------------
1. Subs. by Act 53 of 2000, sec. 131, for “fifty rupees” (w.e.f. 13-12-2000).
--------------------------
Sections 270 1[and 272] shall not apply to a private company, unless it is a subsidiary of a public company.
--------------------------
1. Subs. by Act 31 of 1965, sec. 35, for “to 272” (w.e.f. 15-10-1965).
--------------------------
(1) A person shall not be capable of being appointed director of a company, if—
(a) he has been found to be of unsound mind by a Court of competent jurisdiction and the finding is in force;
(b) he is an undischarged insolvent;
(c) he has applied to be adjudicated as an insolvent and his application is pending;
(d) he has been convicted by a Court 1[***] of any offence involving moral turpitude and sentenced in respect thereof to imprisonment for not less than six months, and a period of five years has not elapsed from the date of expiry of the sentence;
(e) he has not paid any call in respect of shares of the company held by him, whether alone or jointly with others, and six months have ela
After the commencement of this Act, no person shall, save as otherwise provided in section 276, hold office at the same time as director in more than 1[fifteen companies].
---------------------------
1. Subs. by Act 53 of 2000, sec. 133, for “twenty companies” (w.e.f. 13-12-2000).
---------------------------
(1) Any person holding office as director in more than 1[fifteen] companies immediately before the commencement of this Act shall, within two months from such commencement,—
(a) choose not more than 1[fifteen] of those companies, as companies in which he wishes to continue to hold the office of director;
(b) resign his office as director in the other companies; and
(c) intimate the choice made by him under clause (a) to each of the companies in which he was holding the office of director before such commencement, to the Registrar having jurisdiction in respect of each such company, and also to the Central Government.
(2) Any resignation made in pursuance of clause (b) of sub-section (1) shall become effective immediately on the despatch the
(1) Where a person already holding the office of director in 1[fifteen companies] is appointed, after the commencement of 2[the Companies (Amendment) Act, 2000], as a director of any other company, the appointment—
(a) shall not take effect unless such person has, within fifteen days thereof, effectively vacated his office as director in any of the companies in which he was already a director; and
(b) shall become void immediately on the expiry of the fifteen days if he has not, before such expiry, effectively vacated his office as director in any of the other companies aforesaid.
(2) Where a person already holding the office of director in 3[fourteen companies] or less is appointed, after the commencement of 1[the Companies (Amendment) Act, 2000], as a dire
(1) In calculating, for the purposes of sections 275, 276 and 277, the number of companies of which a person may be a director the following companies shall be excluded, namely:—
(a) a private company which is neither a subsidiary nor a holding company of a public company;
(b) an unlimited company;
(c) an association not carrying on business for profit or which prohibits the payment of a dividend;
(d) a company in which such person is only an alternate director, that is to say, a director who is only qualified to act as such during the absence or incapacity of some other director.
(2) In making the calculation aforesaid, any company referred to in clauses (a), (b) and (c) of sub-section (1) sh
Any person who holds office, or acts, as a director of more than 1[fifteen companies] in contravention of the foregoing provisions shall be punishable with fine which may extend to 2[fifty thousand rupees] in respect of each of those companies after the first twenty.
-----------------------------
1. Subs. by Act 53 of 2000, sec. 136, for “twenty companies” (w.e.f. 13-12-2000).
2. Subs. by Act 53 of 2000, sec. 136, for “five thousand rupees” (w.e.f. 13-12-2000).
-----------------------------
[Rep. by the Companies (Amendment) Act, 1965 (31 of 1965), sec. 36 (w.e.f. 15-10-1965).]
[Rep. by the Companies (Amendment) Act, 1965 (31 of 1965), sec. 37 (w.e.f. 15-10-1965).]
[Rep. by the Companies (Amendment) Act, 1965 (31 of 1965), sec. 38 (w.e.f. 15-10-1965).]
(1) 1[The office of a director shall become vacant if—]
(a) he fails to obtain within the time specified in sub-section (1) of section 270, or at any time thereafter ceases to hold, the share qualification, if any, required of him by the articles of the company;
(b) he is found to be of unsound mind by a Court of competent jurisdiction;
(c) he applies to be adjudicated an insolvent;
(d) he is adjudged an insolvent;
2[(e) he is convicted by a Court of any offence involving moral turpitude and sentenced in respect thereof to imprisonment for not less than six months;]
(f) he fails to pay any call in respect of shares of the company held by him w
(1) A company may, by ordinary resolution, remove a director (not being a director appointed by the Central Government in pursuance of section 408) before the expiry of his period of office:
Provided that this sub-section shall not, in the case of a private company, authorise the removal of a director holding office for life on the 1st day of April, 1952, whether or not he is subject to retirement under an age limit by virtue of the articles or otherwise:
Provided further that nothing contained in this sub-section shall apply where the company has availed itself of the option given to it under section 265 to appoint not less than two-thirds of the total number of directors according to the principle of proportional representation.
(2) Special notice shall be required of any resolution to remov
In the case of every company, a meeting of its Board of directors shall be held at least once in every 2[three months and at least four such meetings shall be held in every year]:
Provided that the Central Government may, by notification in the Official Gazette, direct that the provisions of this section shall not apply in relation to any class of companies or shall apply in relation thereto subject to such exceptions, modifications or conditions as may be specified in the notification.]
------------------------------
1. Subs. by Act 65 of 1960, sec. 96, for section 285 (w.e.f. 28-12-1960).
2. Subs. by Act 31 of 1965, sec. 39, for certain words (w.e.f. 15-10-1965).
&nb
(1) Notice of every meeting of the Board of directors of a company shall be given in writing to every director for the time being in India, and at his usual address in India to every other director.
(2) Every officer of the company whose duty it is to give notice as aforesaid and who fails to do so shall be punishable with fine which may extend to 1[one thousand rupees].
---------------------------------
1. Subs. by Act 53 of 2000, sec. 138, for “one hundred rupees” (w.e.f. 13-12-2000).
---------------------------------
(1) In this section—
(a) “total strength” means the total strength of the Board of directors of a company as determined in pursuance of this Act, after deducting therefrom the number of the directors, if any, whose places may be vacant at the time; and
(b) “interested director” means any director whose presence cannot, by reason of section 300, count for the purpose of forming a quorum at a meeting of the Board, at the time of the discussion or vote on any matter.
(2) The quorum for a meeting of the Board of directors of a company shall be one-third of its total strength (any fraction contained in that one-third being rounded off as one), or two directors whichever is higher:
Provided that where at any time the number of interested directors e
(1) If a meeting of the Board could not be held for want of quorum, then, unless the articles otherwise provide, the meeting shall automatically stand adjourned till the same day in the next week, at the same time and place, or if that day is a public holiday, till the next succeeding day which is not a public holiday, at the same time and place.
(2) The provisions of section 285 shall not be deemed to have been contravened merely by reason of the fact that a meeting of the Board which had been called in compliance with the terms of that section could not be held for want of a quorum.
No resolution shall be deemed to have been duly passed by the Board or by a committee thereof by circulation, unless the resolution has been circulated in draft, together with the necessary papers, if any, to all the directors, or to all the members of the committee, then in India (not being less in number than the quorum fixed for a meeting of the Board or committee, as the case may be), and to all other directors or members at their usual address in India, and has been approved by such of the directors as are then in India, or by a majority of such of them, as are entitled to vote on the resolution.
Acts done by a person as a director shall be valid, notwithstanding that it may afterwards be discovered that his appointment was invalid by reason of any defect or disqualification or had terminated by virtue of any provision contained in this Act or in the articles:
Provided that nothing in this section shall be deemed to give validity to acts done by a director after his appointment has been shown to the company to be invalid or to have terminated.
(1) Subject to the provisions of this Act, the Board of directors of a company shall be entitled to exercise all such powers, and to do all such acts and things, as the company is authorised to exercise and do:
Provided that the Board shall not exercise any power or do any act or thing which is directed or required, whether by this or any other Act or by the memorandum or articles of the company or otherwise, to be exercised or done by the company in general meeting:
Provided further that in exercising any such power or doing any such act or thing, the Board shall be subject to the provisions contained in that behalf in this or any other Act, or in the memorandum or articles of the company, or in any regulations not inconsistent therewith and duly made thereunder, including regulations made by the company in general meeting.
&nb
(1) The Board of directors of a company shall exercise the following powers on behalf of the company, and it shall do so only by means of resolutions passed at meetings of the Board:—
(a) the power to make calls on shareholders in respect of money unpaid on their shares;
1[(aa) the power to authorise the buy-back referred to in the first proviso to clause (b) of sub-section (2) of section 77A;]
(b) the power to issue debentures;
(c) the power to borrow moneys otherwise than on debentures;
(d) the power to invest the funds of the company; and
(e) the power to make loans:
2[Provided that the Board may
(1) Every public company having paid-up capital of not less than five crores of rupees shall constitute a committee of the Board knows as Audit Committee which shall consist of not less than three directors and such number of other directors as the Board may determine of which two-thirds of the total number of members shall be directors, other than managing or whole-time directors.
(2) Every Audit Committee constituted under sub-section (1) shall act in accordance with terms of reference to be specified in writing by the Board.
(3) The members of the Audit Committee shall elect a chairman from amongst themselves.
(4) The annual report of the company shall disclose the composition of the Audit Committee.
(5) The auditors, the internal auditor, if any
(1) The Board of directors of a public company, or of a private company which is a subsidiary of a public company, shall not, except with the consent of such public company or subsidiary in general meeting,—
(a) sell, lease or otherwise dispose of the whole, or substantially the whole, of the undertaking of the company, or where the company owns more than one undertaking, of the whole, or substantially the whole, of any such undertaking;
(b) remit, or give time for the re-payment of, any debt due by a director 1[except in the case of renewal or continuance of an advance made by a banking company to its director in the ordinary course of business];
(c) invest, otherwise than in trust securities, 2[the amount of compensation received by the company in respect of the compulsory acquisiti
(1) Notwithstanding anything contained in any other provision of this Act,—
(a) no Government company; and
(b) no other company which has been in existence for less than three financial years,
shall contribute any amount or amounts, directly or indirectly,—
(i) to any political party; or
(ii) for any political purpose to any person.
(2) A company, not being a company referred to in clause (a) or clause (b) of sub-section (1), may contribute any amount or amounts directly or indirectly,—
(a) to any political party, or
(b) for any political purpose to any p
(1) The Board of directors of any company or any person or authority exercising the powers of the Board of directors of a company or of the company in general meeting, may, notwithstanding anything contained in sections 293 and 293A or any other provision of this Act or the memorandum, articles or any other instrument relating to the company, contribute such amount as it thinks fit to the National Defence Fund or any other Fund approved by the Central Government for the purpose of national defence.
(2) Every company shall disclose in its profits and loss account the total amount or amounts contributed by it to the Fund referred to in sub-section (1) during the financial year to which the amount relates.]
------------------------------
1. In
1[(1) No company shall, after the commencement of the Companies (Amendment) Act, 1960, appoint a sole selling agent for any area for a term exceeding five years at a time:
Provided that nothing in this sub-section shall be deemed to prohibit the re-appointment, or the extension of the term of office, of any sole selling agent by further periods not exceeding five years on each occasion.
(2) After the commencement of the Companies (Amendment) Act, 1960, the Board of directors of a company shall not appoint a sole selling agent for any area except subject to the condition that the appointment shall cease to be valid if it is not approved by the company in the first general meeting held after the date on which the appointment is made.
(2A) If the company in general meeting as aforesaid disapprove
(1) A company shall not pay or be liable to pay to its sole selling agent any compensation for the loss of his office in the following cases:—
(a) where the appointment of the sole selling agent ceases to be valid by virtue of sub-section (2A) of section 294;
(b) where the sole selling agent resigns his office in view of the reconstruction of the company or of its amalgamation, with any other body corporate or bodies corporate and is appointed as the sole selling agent of the reconstructed company or of the body corporate resulting from the amalgamation;
(c) where the sole selling agent resigns his office, otherwise than on the reconstruction of the company or its amalgamation as aforesaid;
(d) where the sole selling agent has been guilt
(1) Where the Central Government is of opinion that the demand for goods of any category, to be specified by that Government, is substantially in excess of the production or supply of such goods and that the services of sole selling agents will not be necessary to create a market for such goods, the Central Government may, by notification in the Official Gazette, declare that sole selling agents shall not be appointed by a company for the sale of such goods for such period as may be specified in the declaration.
(2) No company shall appoint any individual, firm or body corporate, who or which has a substantial interest in the company, as sole selling agent of that company unless such appointment has been previously approved by the Central Government.
(3) No company having a paid-up share capital of rupees fifty lakh or more shall appoint
(1) Save as otherwise provided in sub-section (2), no company (hereinafter in this section referred to as “the lending company) 1[without obtaining the previous approval of the Central Government in that behalf shall directly or indirectly,] make any loan to, or give any guarantee or provide any security in connection with a loan made by any other person to, or to any other person by,—
(a) any director of the lending company or of a company which is its holding company or an partner or relative of any such director;
(b) any firm in which any such director or relative is a partner;
(c) any private company of which any such director is a director or member;
(d) any body corporate at a general meeting of which not less than twenty-five per
Section 295 shall apply to any transaction represented by a book debt which was from its inception in the nature of a loan or an advance.]
------------------------------
1. Subs. by Act 65 of 1960, sec. 103, for section 296 (w.e.f. 28-12-1960).
------------------------------
(1) Except with the consent of the Board of directors of a company, a director of the company or his relative, a firm in which such a director or relative is a partner, any other partner in such a firm, or a private company of which the director is a member or director, shall not enter into any contract with the company—
(a) for the sale, purchase or supply of any goods, materials or services; or
(b) after the commencement of this Act, for underwriting the subscription of any shares in, or debentures of, the company:
1[Provided that in the case of a company having a paid-up share capital of not less than rupees one crore, no such contract shall be entered into except with the previous approval of the Central Government.]
2[(2) Nothing containe
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 143 (w.e.f.
13-12-2000).]
(1) Every director of a company who is in any way, whether directly or indirectly, concerned or interested in a contract or arrangement, or proposed contract or arrangement, entered into or to be entered into, by or on behalf of the company, shall disclose the nature of his concern or interest at a meeting of the Board of directors.
(2) (a) In the case of a proposed contract or arrangement, the disclosure required to be made by a director under sub-section (1) shall be made at the meeting of the Board at which the question of entering into the contract or arrangement is first taken into consideration, or if the director was not, at the date of that meeting, concerned or interested in the proposed contract or arrangement, at the first meeting of the Board held after he becomes so concerned or interested.
(b) In the case of any other contr
(1) No director of a company shall, as a director, take any part in the discussion of, or vote on, any contract or arrangement entered into, or to be entered into, by or on behalf of the company, if he is in any way, whether directly or indirectly, concerned or interested in the contract or arrangement; nor shall his presence count for the purpose of forming a quorum at the time of any such discussion or vote; and if he does vote, his vote shall be void.
(2) Sub-section (1) shall not apply to—
(a) a private company which is neither a subsidiary nor a holding company of a public company;
(b) a private company which is a subsidiary of a public company, in respect of any contract or arrangement entered into, or to be entered into, by the private company with the holding company thereof;
1[(1) Every company shall keep one or more registers in which shall be entered separately particulars of all contracts or arrangements to which section 297 or section 299 applies, including the following particulars to the extent they are applicable in each case, namely:—
(a) the date of the contract or arrangement;
(b) the names of the parties thereto;
(c) the principal terms and conditions thereof;
(d) in the case of a contract to which section 297 applies or in the case of a contract or arrangement to which sub-section (2) of section 299 applies, the date on which it was placed before the Board;
(e) the names of the directors voting for and against the contract or arrangement and the nam
(1) Where a company—
(a) enters into a contract for the appointment of a manager of the company, in which contract any director of the company is in any way, whether directly or indirectly, concerned or interested; or
(b) varies any such contract already in existence and in which a director is concerned or interested as aforesaid,
the company shall, within twenty-one days from the date of entering into the contract or of the varying of the contract, as the case may be, send to every member of the company an abstract of the terms of the contract or variation, together with a memorandum clearly specifying the nature of the concern or interest of the director in such contract or variation.
(2) Where a company enters into a contract for the appoin
(1) Every company shall keep at its registered office a register of its directors, managing director, 1[***] manager and secretary, containing with respect to each of them the following particulars, that is to say:—
(a) in the case of an individual, his present name and surname in full; any former name or surname in full; 2[his father’s name and surname in full or where the individual is a married woman, the husband’s name and surname in full] his usual residential address; his nationality; and, if that nationality is not the nationality of origin, his nationality of origin; his business occupation, if any; if he holds the office of director, managing director, 3[***] manager or secretary in any other body corporate, the particulars of each such office held by him; and except in the case of a private company which is not a subsidiary of a public company, the date of his birth;
(1) The register kept under section 303 shall be open to the inspection of any member of the company without charge and of any other person on payment of one rupee for each inspection during business hours subject to such reasonable restrictions as the company may by its articles or in general meeting impose, so that not less than two hours in each day are allowed for inspection.
(2) If any inspection required under sub-section (1) is refused,—
(a) 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]; and
(b) the 2[Central Government or Tribunal, as the case may be,] may, by order, compel an immediate inspection of the register.
&n
(1) Every director, managing director, 2[***] manager or secretary of any company, who is appointed to or relinquishes, the office of director, managing director, 2[***] manager or secretary of any other body corporate, shall, within twenty days of his appointment to, or as the case may be, relinquishment of, such office, disclose to the company aforesaid the particulars relating to the office in the other body corporate which are required to be specified under sub-section (1) of section 303; and if he fails to do so, he shall be punishable with fine which may extend to 3[five thousand rupees].
(2) The provisions of sub-section (1) shall also apply to a person deemed to be a director of the company by virtue of the Explanation to sub-section (1) of section 303 when such person is appointed to, or relinquishes, any of the offices in the other body corporate referred to in sub-sectio
(1) The Registrar shall keep a separate register or registers in which there shall be entered the particulars received by him under sub-section (2) of section 303 in respect of companies, so however that all entries in respect of each such company shall be together.
(2) The register or registers aforesaid shall be open to inspection by any member of the public at any time during office hours, on payment of the prescribed fee.
(1) Every company shall keep a register showing, as respects each director of the company, the number, description and amount of any shares in, or debentures of, the company or any other body corporate, being the company’s subsidiary or holding company, or a subsidiary of the company’s holding company, which are held by him or in trust for him, or of which he has any right to become the holder whether on payment or not.
(2) Where any shares or debentures have to be recorded in the said register or to be omitted therefrom, in relation to any director, by reason of a transaction entered into after the commencement of this Act and while he is a director, the register shall also show the date of, and the price or other consideration for, the transaction:
Provided that where there is an interval between the agreement for any such transaction
—(1) Every director of a company, and every person deemed to be a director of the company by virtue of sub-section (10) of section 307, shall give notice to the company of such matters relating to himself as may be necessary for the purpose of enabling the company to comply with the provisions of that section.
(2) Any such notice shall be given in writing, and if it is not given at a meting of the Board, the person giving the notice shall take all reasonable steps to secure that it is brought up and read at the meeting of the Board next after it is given.
(3) Any person who fails to comply with sub-section (1) or (2) shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to 1[fifty thousand rupees], or with both.
&nb
(1) The remuneration payable to the directors of a company, including any managing or whole-time director, shall be determined, in accordance with and subject to the provisions of section 198 and this section, either by the articles of the company, or by a resolution or, if the articles so require, by a special resolution, passed by the company in general meeting 1[and the remuneration payable to any such director determined as aforesaid shall be inclusive of the remuneration payable to such director for services rendered by him in any other capacity:
Provided that any remuneration for services rendered by any such director in any other capacity shall not be so included if—
(a) the services rendered are of a professional nature, and
(b) in the opinion of the Central Government, the direc
1[In the case of a public company, or a private company which is a subsidiary of a public company, any provision relating to the remuneration of any director including a managing or whole-time director, or any amendment thereof, which purports to increase] or has the effect of increasing, whether directly or indirectly, the amount thereof, whether that provision be contained in the company’s memorandum or articles, or in an agreement entered into by it, or in any resolution passed by the company in general meeting or by its Board of directors 2[shall not have any effect—
(a) in cases where Schedule XIII is applicable, unless such increase is in accordance with the conditions specified in that Schedule; and
(b) in any other case, unless it is approved by the Central Government:]
3[Provide
In the case of a public company, or a private company which is a subsidiary of a public company, if the terms of any re-appointment or appointment of a managing or whole-time director, made after the commencement of this Act, purport to increase or have the effect of increasing, whether directly or indirectly, the remuneration which the managing or whole-time director or the previous managing or whole-time director, as the case may be, was receiving immediately before such re-appointment or appointment, the re-appointment or appointment and shall become void if, and insofar as it is disapproved by that Government 1[shall not have any effect—
(a) in cases where Schedule XIII is applicable, unless such increase is in accordance with the conditions specified in that Schedule; and
(b) in any other case, unless it is approved by the Cen
Any assignment of his office made after the commencement of this Act by any director of a company shall be void.
(1) The Board of directors of a company may, if so authorised by its articles or by a resolution passed by the company in general meeting, appoint an alternate director to act for a director (hereinafter in this section called “the original director”) during his absence for a period of not less than three months from the State in which meetings of the Board are ordinarily held.
1[(2) An alternate director appointed under sub-section (1) shall not hold office as such for a period longer than that permissible to the original director in whose place he has been appointed and shall vacate office if and when the original director returns to the State in which meetings of the Board are ordinarily held.]
(3) If the term of office of the original director is determined before he so returns to the State aforesaid, any provision for the automatic
1[(1) Except with the 2[consent] of the company accorded by a special resolution,—
(a) no director of a company shall hold any office or place of profit, and
(b) 3[no partner or relative of such director, no firm in which such director, or a relative of such director, is a partner, no private company of which such director is a director or member, and no director or manager of such a private company shall hold any office or place of profit carrying a total monthly remuneration of 4[such sum as may be prescribed],
except that of managing director or manager,] banker, or trustee for the holders of debentures of the company—
(i) under the company; or
(ii) under any subsidiary of the company, unless
[Rep. by the Companies (Amendment) Act, 1960 (65 of 1960), sec. 117.]
(1) 1[No public company and no private company which is a subsidiary of a public company] shall, after the commencement of this Act, appoint or employ any person as managing director, if he is either the managing director or the manager of 2[any other company (including a private company which is not a subsidiary of a public company)], except as provided in sub-section (2).
(2) 3[A public company or a private company which is a subsidiary of a public company] may appoint or employ a person as its managing director, if he is the managing director or manager of one, and of not more than one, 4[other company (including a private company which is not a subsidiary of a public company)]:
Provided that such appointment or employment is made or approved by a resolution passed at a meeting of the Board with the consent of all the directors prese
(1) No company shall after, the commencement of this Act, appoint or employ any individual as its managing director for a term exceeding five years at a time.
(2) Any individual holding at the commencement of this Act the office of managing director is a company shall unless his term expires earlier, be deemed to have vacated his office immediately on the expiry of five years from the commencement of this Act.
(3) Nothing contained in sub-section (1) shall be deemed to prohibit the re-appointment, re-employment, or the extension of the term of office, of any person by further periods not exceeding five years on each occasion:
Provided that any such re-appointment, re-employment or extension shall not be sanctioned earlier than two years from the date on which it is to come into force.
(1) Payment may be made by a company, except in the cases specified in sub-section (3), and subject to the limit specified in sub-section (4), to a managing director, or a director holding the office of manager or in the whole-time employment of the company, by way of compensation for loss of office, or as consideration for retirement from office, or in connection with such loss or retirement.
(2) No such payment shall be made by the company to any other director.
(3) No payment shall be made to a managing or other director in pursuance of sub-section (1), in the following cases, namely:—
(a) where the director resigns his office in view of the reconstruction of the company, or of its amalgamation with any other body corporate or bodies corporate, and is appointed as the managing director,
(1) No director of a company shall, in connection with the transfer of the whole or any part of any undertaking or property of the company, receive any payment, by way of compensation for loss of office, or as consideration for retirement from office, or in connection with such loss or retirement—
(a) from such company; or
(b) from the transferee of such undertaking or property or from any other person (not being such company), unless particulars with respect to the payment proposed to be made by such transferee or person (including the amount thereof) have been disclosed to the members of the company and the proposal has been approved by the company in general meeting.
(2) Where a director of a company receives payment of any amount in contravention of sub-section (1), the amount shall
(1) No director of a company shall, in connection with the transfer to any person of all or any of the shares in a company, being a transfer resulting from—
(i) an offer made to the general body of shareholders;
(ii) an offer made by or on behalf of some other body corporate with a view to the company becoming a subsidiary of such body corporate or a subsidiary of its holding company;
(iii) an offer made by or on behalf of an individual with a view to his obtaining the right to exercise, or control the exercise of, not less than one-third of the total voting power at any general meeting of the company; or
(iv) any other offer which is conditional on acceptance to a given extent,
receive any pa
(1) Wherein proceedings for the recovery of any payment as having, by virtue of sub-section (2) of section 319 or sub-section (4) of section 320, been received by any person in trust, it is shown that—
(a) the payment was made in pursuance of any arrangement entered into as part of the agreement for the transfer in question, or within one year before, or within two years after, that agreement or the offer leading thereto; and
(b) the company or any person to whom the transfer was made was privy to that arrangement,
the payment shall be deemed, except insofar as the contrary is shown, to be one to which that sub-section applies.
(2) If in connection with any such transfer as is mentioned in section 319 or in section 320,—
&
(1) In a limited company, the liability of the directors or of any director 1[***] or manager may, if so provided by the memorandum, be unlimited.
(2) In a limited company in which the liability of a director 2[***] or manager is unlimited, the directors 3[***] and the manager of the company, and the member who proposes a person for appointment to the office of director 2[***] or manager, shall add to that proposal a statement that the liability of the person holding that office will be unlimited; and before the person accepts the office or acts therein, notice in writing that his liability will be unlimited, shall be given to him by the following or one of the following persons, namely, the promoters of the company, its directors, 4[***] or manager, if any, and its officers.
(3) If any director, 1[***] manager or proposer makes default
A limited company may, if so authorised by its articles, by special resolution, alter its memorandum so as to render unlimited the liability of its directors or of any director 1[***] or manager.
(2) Upon the passing of any such special resolution, the provisions thereof shall be as valid as if they had been originally contained in the memorandum:
Provided that no alteration of the memorandum making the liability of any of the officers referred to in sub-section (1) unlimited shall apply to such officer, if he was holding the office from before the date of the alteration, until the expiry of his then term, unless he has accorded his consent to his liability becoming unlimited.
---------------------------
&nbs
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]]
---------------------------
1. Section 324A was earlier inserted by Act 17 of 1969, sec. 4 (w.e.f. 28-5-1969).
---------------------------
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]]
---------------------------
1. Section 325A was earlier inserted by Act 65 of 1960, sec. 121 (w.e.f. 28-12-1960).
---------------------------
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
Sections 386, 387 and 388 shall not apply to a private company unless it is a subsidiary of a public company.]
-----------------------------
1. Ins. by Act 65 of 1960, sec. 149 (w.e.f. 28-12-1960).
-----------------------------
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).]
(1) In computing 1[***] the net profits of a company in any financial year—
(a) credit shall be given for the sums specified in sub-section (2) and credit shall not be given for those specified in sub-section (3); and
(b) the sums specified in sub-section (4) shall be deducted, and those specified in sub-section (5) shall not be deducted.
(2) In making the computation aforesaid, credit shall be given for the following sums:—
bounties and subsidies received from any Government, or any public authority constituted or authorised in this behalf, by any Government, unless and except in so far as the Central Government otherwise directs.
(3) In making the computation aforesaid credit sha
The amount of depreciation to be deducted in pursuance of clause (k) of sub-section (4) of section 349 shall be 2[the amount of depreciation on assets] as shown by the books of the company at the end of the financial year expiring at the commencement of this Act or immediately thereafter and at the end of each subsequent financial year, 3[at the rate specified in Schedule XIV]:
Provided that if any asset is sold, discarded, demolished or destroyed for any reason before depreciation of such asset has been provided for in full, the excess, if any, of the written-down value of such asset over its sale proceeds or, as the case may be, its scrap value, shall be written off in the financial year in which the asset is sold, discarded, demolished or destroyed.]
------------------------------------
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 162 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 162 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 162 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 162 (w.e.f. 13-12-2000).]
Sections 1[349 and 350] shall not apply to a private company unless it is a subsidiary of a public company.
------------------------------------
1. Subs. by Act 53 of 2000, sec. 163, for “348 to 354” (w.e.f. 13-12-2000).
------------------------------------
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).]
(1) No company (hereinafter in this section referred to as “the lending company”) shall—
(a) make any loan to, or
(b) give any guarantee, or provide any security, in connection with a loan made by any other person to, or to any other person by,
any body corporate 1[***] unless the making of such loan, the giving of such guarantee or the provision of such security has been previously authorised by a special resolution of the lending company:
2[Provided that no special resolution shall be necessary in the case of loans made to other bodies corporate not under the same management as the lending company where the aggregate of such loans does not exceed 3[such percentage of the aggregate of the subscribed capital of the lending company and its fre
Where any loan made, guarantee given or security provided by a company and outstanding at the commencement of the Companies (Amendment) Act, 1960 (65 of 1960), would not have been made, given or provided if 2[***] section 370 had been in force at the time when such loan was made, guarantee given or security provided, the company shall, within six months from, the commencement of that Act, enforce the repayment of the loan made or, as the case may be, revoke the guarantee given or the security provided, notwithstanding any agreement to the contrary:
Provided that the period of six months within which the company is required by this section to enforce the repayment of the loan or to revoke the guarantee or security, may be extended—
3[***]
(b) in the case of a loan, guarantee or security unde
(1) Every person who is a party to any contravention of 1[2[***] section 370 [excluding sub-section (1C) or (1D)], or section 370A] including in particular any person to whom the loan is made, or in whose interest the guarantee is given or the security is provided, shall be punishable with fine which may extend to 3[fifty thousand rupees] or with simple imprisonment for a term which may extend to six months:
Provided that where any such loan, or any loan in connection with which any such guarantee or security has been given or provided by the lending company, has been repaid in full, no punishment by way of imprisonment shall be imposed under this sub-section; and where the loan has been repaid in part, the maximum punishment which may be imposed under this sub-section by way of imprisonment shall be proportionately reduced.
(2) All pers
2[(1) A company, whether by itself or together with its subsidiaries (hereafter in this section and section 373 referred to as the investing company), shall not be entitled to acquire, by way of subscription, purchase or otherwise (whether by itself, or by any individual or association of individuals in trust for it or for its benefit or on its account) the shares of any other body corporate except to the extent, and except in accordance with the restrictions and conditions, specified in this section.]
(2) 3[The Board of directors of the investing company shall be entitled to invest in any shares of any other body corporate up to such percentage of the subscribed equity share capital, or the aggregate of the paid-up equity and preference share capital, of such other body corporate, whichever is less, as may be prescribed]:
Provided that
(1) No company shall, directly or indirectly,—
(a) make any loan to any other body corporate;
(b) give any guarantee, or provide security, in connection with a loan made by any other person to, or to any other person by, any body corporate; and
(c) acquire, by way of subscription, purchase or otherwise the securities of any other body corporate,
exceeding sixty per cent of its paid-up share capital and free reserves, or one hundred per cent of its free reserves, whichever is more:
Provided that where the aggregate of the loans and investments so far made, the amounts for which guarantee or security so far provided to or in all other bodies corporate, along with the investment, loan, guarantee or
Where any investments have been made by a company 1[in any other body corporate in the same group] at any time after the first day of April, 1952, which, if section 372 had been then in force, could not have been made except on the authority of a resolution passed by the investing company and the approval of the Central Government, the authority of the company by means of a resolution and the approval of the Central Government shall be obtained to such investments, within six months from the commencement of this Act; and if such authority and approval are not so obtained, the Board of directors of the company shall dispose of the investments, insofar as they may be in excess of the limits specified in sub-section (2) of section 372 and 2[the second proviso to that sub-section], within two years from the commencement of this Act.
------
If default is made in complying with the provisions of 1[section 372 [excluding sub-sections (6) and (7)] or section 373], every officer of the company who is in default shall be punishable with fine which may extend to 2[fifty thousand rupees].
----------------------------
1. Subs. by Act 65 of 1960, sec. 140, for “section 372 or 373” (w.e.f. 28-12-1960).
2. Subs. by Act 53 of 2000, sec. 167, for “five thousand rupees” (w.e.f. 13-12-2000).
----------------------------
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 168 (w.e.f. 13-12-2000).]
Board of Directors of, the company, or in an agreement between the company and any other person, whether made before or after the commencement of this Act, prohibits the reconstruction of the company or its amalgamation with any body corporate or bodies corporate, either absolutely or except on the condition that the managing director or manager of the company is appointed or re-appointed as managing director or manager of the reconstructed company or of the body resulting from amalgamation, as the case may be, shall become void with effect from the commencement of this Act, or be void, as the case may be.]
----------------------------
1. Subs. by Act 53 of 2000, sec. 169, for section 376 (w.e.f. 13-12-2000).
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 170 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 170 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 170 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 170 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 170 (w.e.f. 13-12-2000).]
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 170 (w.e.f. 13-12-2000).]
(1) Every company 2[having such paid-up share capital as may be prescribed*] shall have a whole-time secretary and where the Board of directors of any such company comprises only two directors, neither of them shall be the secretary of the company:
3[Provided that every company not required to employ a whole-time secretary under sub-section (1) and having a paid-up share capital of ten lakh rupees or more shall file with the Registrar a certificate from a secretary in whole-time practice in such form and within such time and subject to such conditions as may be prescribed, as to whether the comapny has complied with all provisions of this Act and a copy of such certificate shall be attached with Board’s report referred to in section 217.]
4[(1A) If a company fail to comply with the provisions of sub-section (1), the company and every off
1[No company] shall, after the commencement of this Act, appoint or employ, or after the expiry of six months from such commencement continue the appointment or employment of, any firm, body corporate or association as its manager.
---------------------------
1. Subs. by Act 65 of 1960, sec. 145, for certain words (w.e.f. 28-12-1960).
---------------------------
(1) No company shall, after the commencement of this Act, appoint or employ, or continue the appointment or employment of, any person as its manager who—
(a) is an undischarged insolvent, or has at any time within the preceding five years been adjudged an insolvent; or
(b) suspends, or has at any time within the preceding five years suspended, payment to his creditors; or makes, or has at any time within the preceding five years made, a composition with them; or
(c) is, or has at any time within the preceding five years been, convicted by a Court in India of an offence involving moral turpitude.
(2) The Central Government may, by notification in the Official Gazette remove the disqualification incurred by any person in virtue of clause (a),
(1) No company shall, after the commencement of this Act, appoint or employ any person as manager, if he is either the manager or the managing director of any other company, except as provided in sub-section (2).
(2) A company may appoint or employ a person as its manager, if he is the manager or managing director of one, and not more than one, other company:
Provided that such appointment or employment is made or approved by a resolution passed at a meeting of the Board with the consent of all the directors present at the meeting, and of which meeting and of the resolution to be moved thereat, specific notice has been given to all the directors then in India.
(3) Where at the commencement of this Act, any person is holding the office either of manager or of managing director in more than two
The manager of a company may, subject to the provisions of section 198, receive remuneration either by way of a monthly payment, or by way of a specific percentage, 1[***] of the “net profits” of the company calculated in the manner laid down in sections 349 2[and 350], or partly by the one way and partly by the other:
3[Provided that except with the approval of the Central Government such remuneration shall not exceed in the aggregate five per cent of the net profits.]
-----------------------------
1. The words “not exceeding five” omitted by Act 65 of 1960, sec. 147 (w.e.f. 28-12-1960).
2. Subs. by Act 53 of 2000, sec. 172, for “, 350 and 351” (w.e.f. 13-12-2000).
&
The provisions of sections 1[269, 310], 311 and 317 shall apply in relation to the manager of a company as they apply in relation to a managing director thereof, and those of section 312 shall apply in relation to the manager of a company, as they apply to a director thereof.
-----------------------------
1. Subs. by Act 65 of 1960, sec. 148, for “310” (w.e.f. 28-12-1960).
-----------------------------
(1) Where in the opinion of the Central Government there are circumstances suggesting—
(a) that any person concerned in the conduct and management of the affairs of a company is or has been in connection therewith guilty of fraud, misfeasance, persistent negligence or default in carrying out his obligations and functions under the law, or breach of trust; or
(b) that the business of a company is not or has not been conducted and managed by such person in accordance with sound business principles or prudent commercial practices; or
(c) that a company is or has been conducted and managed by such person in a manner which is likely to cause, or has caused, serious injury or damage to the interest of the trade industry or business to which such company pertains; or
&nb
(1) Where during the pendency of a case before the 2[3[4[Tribunal]]] it appears necessary to the 2[3[4[Tribunal]]] so to do in the interest of the members or creditors of the company or in the public interest, the 2[3[4[Tribunal]]] may on the application of the Central Government or on its own motion, by an order—
(a) direct that the respondent shall not discharge any of the duties of his office until further orders of the 2[3[4[Tribunal]]], and
(b) appoint a suitable person in pace of the respondent to discharge the duties of the office held by the respondent subject to such terms and conditions as the 2[3[4[Tribunal]]] may specify in the order.
(2) Every person appointed under clause (b) of sub-section (1) shall be deemed to be a public servant within the meaning of section 21 of the I
At the conclusion of the hearing of the case, the 3[4[5[Tribunal]]] shall record its 2[decision] stating therein specifically as to whether or not the respondent is a fit and proper person to hold the office of director or any other office connected with the conduct and management of any company.]
---------------------------------
1. Section 388D ins. by Act 53 of 1963, sec. 9 (w.e.f. 1-1-1964).
2. Subs. by Act 17 of 1967, sec. 4 and Sch., for “Findings” (w.e.f. 1-7-1967).
3. Subs. by Act 17 of 1967, sec. 4 and Sch., for “Tribunal” (w.e.f. 1-7-1967).
4. Subs. by Act 31 of 1988, sec. 67, for “High Court” (w.e.f. 31-5-1991).
(1) Notwithstanding any other provision contained in this Act, the 5[Central Government shall], by order, remove from office any director, or any other person concerned in the conduct and management of the affairs, of a company against whom where is a 6[decision of the 2[3[4[Tribunal]]] under this Chapter]:
7[***]
8[***]
(3) The person against whom an order of removal from office is made under this section shall not hold the office of a director or any other office connected with the conduct and management of the affairs of any company during a period of five years from the date of the order of removal:
Provided that the Central Government may, with the previous concurrence of the 2[3[4[Tribunal]]] permit such person to hold any such office before t
[Rep. by the Companies (Amendment) Act, 1960 (65 of 1960), sec. 150 (w.e.f. 28-12-1960).]
In sections 391 and 393,—
(a) the expression “company” means any company liable to be wound up under this Act;
(b) the expression “arrangement” includes a reorganization of the share capital of the company by the consolidation of shares of different classes, or by the division of shares into shares of different classes or, by both those methods; and
(c) unsecured creditors who may have filed suits or obtained decrees shall be deemed to be of the same class as other unsecured creditors.
(1) Where a compromise or arrangement is proposed—
(a) between a company and its creditors or any class of them; or
(b) between a company and its members or any class of them,
the 1[Tribunal] may, on the application of the company or of any creditor or member of the company or, in the case of a company which is being wound up, of the liquidator, order a meeting of the creditors or class of creditors, or of the members or class of members, as the case may be to be called, held and conducted in such manner as the 1[Tribunal] directs.
(2) If a majority in number representing three-fourths in value of the creditors, or class of creditors, or members, or class of members as the case may be, present and voting either in person or, where prox
(1) Where the Tribunal makes an order under section 391 sanctioning a compromise or an arrangement in respect of a company, it—
(a) shall have power to supervise the carrying out of the compromise or an arrangement; and
(b) may, at the time of making such order or at any time thereafter, give such directions in regard to any matter or make such modifications in the compromise or arrangement as it may consider necessary for the proper working of the compromise or arrangement.
(2) If the Tribunal aforesaid is satisfied that a compromise or an arrangement sanctioned under section 391 cannot be worked satisfactorily with or without modifications, it may, either on its own motion or on the application of any person interested in the affairs of the company, make an order winding up the company
(1) Where a meeting of creditors or any class of creditors, or of members or any class of members, is called under section 391,—
(a) with every notice calling the meeting which is sent to a creditor or member, there shall be sent also a statement setting forth the terms of the compromise or arrangement and explaining its effect; and in particular, stating any material interests of the directors, managing director 1[***] or manager of the company, whether in their capacity as such or as members or creditors of the company or otherwise, and the effect on those interests of the compromise or arrangement if, and in so far as, it is different from the effect on the like interests of other persons; and
(b) in every notice calling the meeting which is given by advertisement, there shall be included either such a statement as aforesaid or
(1) Where an application is made to the 1[Tribunal] under section 391 for the sanctioning of a compromise or arrangement proposed between a company and any such persons as are mentioned in that section, and it is shown to the 1[Tribunal]—
(a) that the compromise or arrangement has been proposed for the purposes of, or in connection with, a scheme for the reconstruction of any company or companies, or the amalgamation of any two or more companies; and
(b) that under the scheme the whole or any part of the undertaking, property or liabilities of any company concerned in the scheme (in this section referred to as a “transferor company”) is to be transferred to another company (in this section referred to as “the transferee company”);
the 1[Tribunal] may, either by the order sanctioning the
The 2[Tribunal] shall give notice of every application made to it under section 391 or 394 to the Central Government, and shall take into consideration the representations, if any, made to it by that Government before passing any order under any of these sections.]
--------------------------------
1. Ins. by Act 31 of 1965, sec. 50 (w.e.f. 15-10-1965).
2. Subs. by Act 11 of 2003, sec. 42, for “Court”.
--------------------------------
(1) Where a scheme or contract involving the transfer of shares or any class of shares in a company (in this section referred to as “the transferor company”) to another company (in this section referred to as “the transferee company”), has, within four months after the making of the offer in that behalf by the transferee company, been approved by the holders of not less than nine-tenths in value of the shares whose transfer is involved (other than shares already held at the date of the offer by, or by a nominee for, the transferee company or its subsidiary), the transferee company may, at any time within two months after the expiry of the said four months, give notice in the prescribed manner to any dissenting shareholder, that it desires to acquire his shares; and when such a notice is given, the transferee company shall, unless, on an application made by the dissenting shareholder within one month from the date on which the
(1) Where the Central Government is satisfied that it is essential in the 1[public interest] that two or more companies should amalgamate, then, notwithstanding anything contained in sections 394 and 395 but subject to the provisions of this section, the Central Government may, by order notified in the Official Gazette, provide for the amalgamation of those companies into a single company with such constitution; with such property, powers, rights, interests, authorities and privileges; and with such liabilities, duties, and obligations; as may be specified in the order.
(2) 2[The order aforesaid may provide for the continuation by or against the transferee company of any legal proceedings pending by or against any transferor company and may also] contain such consequential, incidental and supplemental provisions as may, in the opinion of the Central Government, be necessary to give
The books and papers of a company which has been amalgamated with, or whose shares have been acquired by, another company under this Chapter shall not be disposed of without the prior permission of the Central Government and before granting such permission, that Government may appoint a person to examine the books and papers or any of them for the purpose of ascertaining whether they contain any evidence of the commission of an offence in connection with the promotion or formation, or the management of the affairs, of the first-mentioned company or its amalgamation or the acquisition of its shares.]
----------------------------------
1. Ins. by Act 31 of 1965, sec. 52 (w.e.f. 15-10-1965).
----------------------------------
(1) Any member of a company who complain that the affairs of the company 2[are being conducted in a manner prejudicial to public interest or] in a manner oppressive to any member or members (including any one or more of themselves) may apply to the 1[Tribunal] for an order under this section, provided such members have a right so to apply in virtue of section 399.
(2) If, on any application under sub-section (1), the Court is of opinion—
(a) that the company’s affairs 2[are being conducted in a manner prejudicial to public interest or] in a manner oppressive to any member or members; and
(b) that to wind up the company would unfairly prejudice such member or members, but that otherwise the facts would justify the making of a winding-up order on the ground that it was just and equitable t
(1) Any members of a company who complain—
(a) that the affairs of the company 2[are being conducted in a manner prejudicial to public interest or] in a manner prejudicial to the interests of the company; or
(b) that a material change not being a change brought about by, or in the interests of, any creditors including debenture holders, or any class of shareholders, of the company) has taken place in the management or control of the company, whether by an alteration in its Board of directors, 3[***] 4[or manager], 5[***] or in the ownership of the company’s shares, or if it has no share capital, in its membership, or in any other manner whatsoever, and that by reason of such change, it is likely that the affairs of the company 6[will be conducted in a manner prejudicial to public interest or] in a mann
(1) The following members of a company shall have the right to apply under section 397 or 398:—
(a) in the case of a company having a share capital, not less than one hundred members of the company or not less than one-tenth of the total number of its members, whichever is less or any members or members holding not less than one-tenth of the issued share capital of the company, provided that the applicant or applicants have paid all calls and other sums due on their shares;
(b) in the case of a company not having a share capital, not less than one-fifth of the total number of its members.
(2) For the purposes of sub-section (1), where any share or shares are held by two or more persons jointly, they shall be counted only as one member.
(3) Whe
The 1[Tribunal] shall give notice of every application made to it under section 397 or 398 to the Central Government, and shall take into consideration the representation, if any, made to it by that Government before passing a final order under that section.
----------------------------------
1. Subs. by Act 11 of 2003, sec. 44, for “Company Law Board”. Earlier the words “Company Law Board” were substituted by Act 31 of 1988, sec. 67, for the word “Court” (w.e.f. 31-5-1991).
---------------------------------
The Central Government may itself apply to the 1[Tribunal] for an order under section 397 or 398, or cause an application to be made to the 1[Tribunal] for such an order by any person authorised by it in this behalf.
----------------------------------
1. Subs. by Act 11 of 2003, sec. 44, for “Company Law Board”. Earlier the words “Company Law Board” were substituted by Act 31 of 1988, sec. 67, for the word “Court” (w.e.f. 31-5-1991).
----------------------------------
Without prejudice to the generality of the powers of the 1[Tribunal] under section 397 or 398, any order under either section may provide for—
(a) the regulation of the conduct of the company’s affairs in future;
(b) the purchase of the shares or interests of any members of the company by other members thereof or by the company;
(c) in the case of a purchase of its shares by the company as aforesaid, the consequent reduction of its share capital;
(d) the termination, setting aside or modification of any agreement, howsoever arrived at, between the company on the one hand; and any of the following persons, on the other, namely:—
(i) the managing director,
&nb
Pending the making by it of a final order under section 397 or 398, as the case may be, the 1[Tribunal] may, on the application of any party to the proceeding, make any interim order which it thinks fit for regulating the conduct of the company’s affairs, upon such terms and conditions as appear to it to be just and equitable.
---------------------------
1. Subs. by Act 11 of 2003, sec. 44, for “Company Law Board”. Earlier the words “Company Law Board” were substituted by Act 31 of 1988, sec. 67, for the word “Court” (w.e.f. 31-5-1991).
---------------------------
(1) Where an order under section 397 or 398 makes any alteration in the memorandum or articles of a company, then, notwithstanding any other provision of this Act, the company shall not have power except to the extent, if any, permitted in the order to make without the leave of the 1[Tribunal] any alteration whatever which is inconsistent with the order, either in the memorandum or in the articles.
(2) Subject to the provisions of sub-section (1), the alterations made by the order shall in all respects have the same effect as if they had been duly made by the company in accordance with the provisions of this Act; and the said provisions shall apply accordingly to the memorandum or articles as so altered.
(3) A certified copy of every order altering, or giving leave to alter, a company’s memorandum or articles, shall within 2[thirty] days
If the managing director or any other director 1[***] or the manager, of a company, or any other person, who has not been impleaded as a respondent to any application under section 397 or 398 applies to be added as a respondent thereto, the 2[Tribunal] shall, if it is satisfied that there is sufficient cause for doing so, direct that he may be added as a respondent accordingly.
---------------------------
1. The words “, the managing agent, secretaries and treasurers” omitted by Act 53 of 2000, sec. 181 (w.e.f. 13-12-2000).
2. Subs. by Act 11 of 2003, sec. 44, for “Company Law Board”. Earlier the words “Company Law Board” were substituted by Act 31 of 1988, sec. 67, for the word “Court” (w.e.f. 31-5-1991).
&nb
In relation to an application under section 397 or 398, sections 539 to 544, both inclusive, shall apply in the form set forth in Schedule XI.
(1) Where an order 1[***] made under section 397 or 398 terminates, sets aside, or modifies an agreement such as is referred to in clause (d) or (c) of section 402,—
(a) the order shall not give rise to any claims whatever against the company by any person for damages or for compensation for loss of office or in any other respect either in pursuance of the agreement or otherwise;
(b) no managing or other director 2[***] or manager whose agreement is so terminated or set aside 3[***] shall, for a period of five years from the date of 4[the order terminating or setting aside the agreement] without the leave of the 5[Tribunal] be appointed, or act, as the managing or other director 2[***] or manager of the company.
(2) (a) Any person who knowingly acts as a managing or other director 2[***]
1[(1) Notwithstanding anything contained in this Act, the Central Government may appoint such number of persons as the 2[Tribunal] may, by order in writing, specify as being necessary to effectively safeguard the interests of the company, or its shareholders or the public interests to hold office as directors thereof for such period, not exceeding three years on any one occasion, as it may think fit, if the 2[Tribunal], on a reference made to it by the Central Government or on an application of not less than one hundred members of the company or of the members of the company holding not less than one-tenth of the total voting power therein, is satisfied, after such inquiry as it deems fit to make, that it is necessary to make the appointment or appointments in order to prevent the affairs of the company being conducted either in a manner which is oppressive to any members of the company or in a manner which is prejudicial to
(1) Where a complaint is made to the 1[Tribunal] by the managing director or any other director 2[3[***] or the manager], or a company that as a result of a change which has taken place or is likely to take place in the ownership of any shares held in the company, a change in the Board of directors is likely to take place which (if allowed) would affect prejudicially the affairs of the company, the 1[Tribunal] may, if satisfied, after such inquiry as it thinks fit to make that it is just and proper so to do by order, direct that 4[no resolution passed or that may be passed or no action taken or that may be taken] to effect a change in the Board of directors after the date of the complaint shall have effect unless confirmed by the 5[Tribunal]; and any such order shall have effect notwithstanding anything to the contrary contained in any other provision of this Act or in the memorandum or articles of the company, or in any agre
For the purpose of advising the Central Government and the 2[Tribunal] on such matters arising out of the administration of this Act as may be referred to it by that Government 3[or the Tribunal], the Central Government may constitute an Advisory Committee consisting of not more than five persons with suitable qualifications.]
---------------------------------
1. Subs. by Act 31 of 1965, sec. 53, for sections 410 to 415 (w.e.f. 15-10-1965).
2. Subs. by Act 11 of 2003, sec. 45, for “Company Law Board”.
3. Subs. by Act 11 of 2003, sec. 45, for “or Board”.
---------------------------------
______________________
1. Substituted by Act 31 of 1965, section 53, for sections 410 to 415 (w.e.f. 15-10-1965).
(1) Every person, being the 1[***] manager or other agent of a public company or of a private company which is a subsidiary of a public company, who enters into a contract for or on behalf of the company in which contract the company is an undisclosed principal shall, at the time of entering into the contract, make a memorandum in writing of the terms of the contract, and specify therein the person with whom it is entered into.
(2) Every such person who enters into a contract as aforesaid shall forthwith deliver the memorandum to the company and send copies thereof to each of the directors; and such memorandum shall be filed in the office of the company and laid before the Board of directors at its next meeting.
(3) If default is made in complying with the requirements of this section,—
(a)
1[(1) Any money or security deposited with a company by any of its employee in pursuance of his contract of service with the company shall be kept or deposited by the company within fifteen days from the date of deposit—
(a) in a post office savings bank account, or
(b) in a special account to be opened by the company for the purpose in the State Bank of India or in a Scheduled Bank, or
(c) where the company itself is a Scheduled Bank, in a special account to be opened by the company for the purpose either in itself or in the State Bank of India or in any other Scheduled Bank.]
(2) No portion of such moneys or securities shall be utilized by the company except for the purposes agreed to in the contracts of service.
&nbs
1[(1) Where a provident fund has been constituted by a company for its employees or any class of its employees, all moneys contributed to such fund (whether by the company or by the employees) or received or accruing by way of interest or otherwise to such fund shall, within fifteen days from the date of contribution receipt or accrual, as the case may be, either—
(a) be deposited—
(i) in a post office savings bank account, or
(ii) in a special account to be opened by the company for the purpose in the State Bank of India or in a Scheduled Bank, or
(iii) where the company itself is a Scheduled Bank, in a special account to be opened by the company for the purpose either in itself or in the State Bank of India or in any other Scheduled Ba
An employee shall be entitled, on request made in this behalf to the company, or to the trustees referred to in sub-section (4) of section 418, as the case may be, to see the bank’s receipt for any money or security such as is referred to in sections 417 and 418.
Any officer of a company, or any such trustee of a provident fund as is referred to in sub-section (4) of section 418 who, knowingly, contravenes, or authorises or permits the contravention of, the provisions of section 417, 418 or 419, shall be punishable with 1[imprisonment for a term which may extend to six months, or with fine which may extend to 2[ten thousand rupees]].
--------------------------------
1. Subs. by Act 65 of 1960, sec. 160, for “fine which may extend to five hundred rupees” (w.e.f. 28-12-1960).
2. Subs. by Act 53 of 2000, sec. 185, for “one thousand rupees” (w.e.f. 13-12-2000).
--------------------------------
Every receiver of the property of a company who has been appointed under a power conferred by any instrument and who has taken possession, shall once in every half year while he remains in possession, and also on ceasing to act as receiver, file with the Registrar an abstract in the prescribed form of his receipts and payments during the period to which the abstract relates.
Where a receiver of the property of a company has been appointed, every invoice, order for goods, or business letter issued by or on behalf of the company, or the receiver of the company, being a document on or in which the name of the company appears, shall contain a statement that a receiver has been appointed.
If default is made in complying with the requirements of section 421 or 422, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to 1[two thousand rupees]. For the purposes of this section, the receiver shall be deemed to be an officer of the company.
------------------------------------
1. Subs. by Act 53 of 2000, sec. 186, for “two hundred rupees” (w.e.f. 13-12-2000).
------------------------------------
The provisions of sections 421 to 423 shall apply to the receiver of, or any person appointed to manage, the property of a company, appointed by the Tribunal or to any person appointed to manage, the property of a company under any powers contained in an instrument, in like manner as they apply to a receiver appointed under any powers contained in an instrument.]
------------------------------------
1. Subs. by Act 11 of 2003, sec. 46, for section 424.
------------------------------------
(1) Where an industrial company, has become a sick industrial company, the Board of directors of such company shall make a reference to the Tribunal, and prepare a scheme of its revival and rehabilitation and submit the same to the Tribunal along with an application containing such particulars as may be prescribed, for determination of the measures which may be adopted with respect to such company:
Provided that nothing contained in this sub-section shall apply to a Government company:
Provided further that a Government company may, with the prior approval of the Central Government or a State Government, as the case may be, make a reference to the Tribunal in accordance with the provisions of this sub-section and thereafter all the provisions of this Act shall apply to such Government company:
(1) The Tribunal may make such inquiry as it may deem fit for determining whether any industrial company has become a sick industrial company—
(a) upon receipt of a reference with respect to such company under section 424A; or
(b) upon information received with respect to such company or upon its own knowledge as to the financial condition of the company.
(2) The Tribunal may, if it deems necessary or expedient so to do for the expeditious disposal of an inquiry under sub-section (1), require by order any operating agency to enquire into the scheme for revival and make a report with respect to such matters as may be specified in the order.
(3) The operating agency shall complete its inquiry as expeditiously as possible and submit its report to
(1) If after making an inquiry under section 424B, the Tribunal is satisfied that a company has become a sick industrial company, the Tribunal shall, after considering all the relevant facts and circumstances of the case, decide, as soon as may be, by an order in writing, whether it is practicable for the company to make its net worth exceed the accumulated losses or make the repayment of its debt referred to in clause (b) of sub-section (2) of section 424A within a reasonable time.
(2) If the Tribunal decides under sub-section (1) that it is practicable for a sick industrial company to make its net worth exceed the accumulated losses or pay its debt referred to in that sub-section within a reasonable time, the Tribunal shall, by order in writing and subject to such restrictions or conditions as may be specified in the order, give such time to the company as it may deem fit to make
(1) Where an order is made under sub-section (3) of section 424C in relation to any sick industrial company, the operating agency specified in the order shall prepare as expeditiously as possible and ordinarily within a period of sixty days from the date of such order, having regard to the guidelines framed by the Reserve Bank of India in this behalf, a scheme with respect to such company providing for any one or more of the following measures, namely:—
(a) the financial reconstruction of such industrial company;
(b) the proper management of such industrial company by change in, or take over of, the management of such industrial company;
(c) the amalgamation of—
(i) such industrial company with any other company; or
(1) Where the scheme relates to preventive, ameliorative, remedial and other measures with respect to the sick industrial company, the scheme may provide for financial assistance by way of loans, advances or guarantees or reliefs or concessions or sacrifices from the Central Government, a State Government, any scheduled bank or other bank, a public financial institution or State level institution or any institution or other authority (any Government, bank, institution or other authority required by a scheme to provide for such financial assistance being hereafter in this section referred to as the person required by the scheme to provide financial assistance) to the sick industrial company.
(2) Every scheme referred to in sub-section (1) shall be circulated to every person required by the scheme to provide financial assistance for his consent within a period of sixty days from the
(1) At any time before completion of the inquiry under section 424B, the sick industrial company or the Central Government or the Reserve Bank of India or a State Government or a public financial institution or a State level institution or a scheduled bank or any other institution, bank or authority providing or intending to provide any financial assistance by way of loans or advances or guarantees or reliefs, or concessions to such industrial company may make an application to the Tribunal—
(a) agreeing to an arrangement for continuing the operations of the sick industrial company; or
(b) suggesting a scheme for the financial reconstruction of the sick industrial company.
(2) The Tribunal may, within sixty days of the receipt of the application under sub-section (1), pass such orders th
(1) Where the Tribunal, after making inquiry under section 424B and after consideration of all the relevant facts and circumstances and after giving an opportunity of being heard to all concerned parties, is of the opinion that the sick industrial company is not likely to make its net worth exceed the accumulated losses within a reasonable time while meeting all its financial obligations and that the company as a result thereof is not likely to become viable in future and that it is just and equitable that the company should be wound up, it may record its findings and order winding up of the company.
(2) For the purpose of winding up of the sick industrial company, the Tribunal may appoint any officer of the operating agency, if the operating agency gives its consent, as the liquidator of such industrial company and the officer so appointed shall for the purpose of the winding up o
Where for the proper discharge of the functions of the Tribunal under this Part, the circumstances so require, the Tribunal may, through any operating agency, cause to be prepared—
(a) with respect to a company a complete inventory of—
(i) all assets and liabilities of whatever nature;
(ii) all books of account, registers, maps, plans, records, documents of title or ownership of property and all other documents of whatever nature relating thereto;
(b) a list of shareholders and a list of creditors showing separately in the list of creditors, the secured creditors and unsecured creditors;
(c) a valuation report in respect of the shares and assets in order to arrive at the reserve price for t
The Tribunal may, if it is of opinion, that any direction is necessary in the interest of the sick industrial company or creditors or shareholders or in the public interest, by order, direct such company not to dispose of, except with the prior approval of the Tribunal, any of its assets during the period of inquiry under section 424B or during the period of preparation or consideration of the scheme under section 424C.]
-----------------
1. Section 424-I ins. by Act 11 of 2003, sec. 47.
On receipt of reference under section 424A, the Tribunal may call for any periodic information from the company as to the steps taken by the company to make its net worth exceed the accumulated losses or to make repayment of its debts referred to in that section, as the case may be, and the company shall furnish such information.]
-----------------
1. Section 424J ins. by Act 11 of 2003, sec. 47.
(1) If, in the course of scrutiny or implementation of any scheme or proposal, it appears to the Tribunal that any person who has taken part in the promotion, formation or management of the sick industrial company or its undertaking, including any past or present director, manager or officer or employee of the sick industrial company—
(a) has misapplied or retained, or become liable or accountable for, any money or property of the sick industrial company; or
(b) has been guilty of any misfeasance, malfeasance or non-feasance of breach of trust in relation to the sick industrial company,
the Tribunal may, by order, direct him to repay or restore the money or property or any part thereof, with or without interest, as it thinks just, or to contribute such sum to the assets of the sick indus
(1) Whoever violates provisions of this Part or any scheme, or any order, of the Tribunal or the Appellate Tribunal or makes a false statement or gives false evidence to the Tribunal or the Appellate Tribunal, and attempts to tamper the records of reference or appeal filed under this Act, shall be punishable with simple imprisonment for a term which may extend to three years or shall be liable to fine not exceeding ten lakhs rupees.
(2) No court shall take cognizance of any offence under sub-section (1) except on a complaint in writing of an officer of the Tribunal or the Appellate Tribunal or any officer of the Central Government authorised by it or any officer of an operating agency as may be authorised in this behalf by the Tribunal or the Appellate Tribunal as the case may be.]
-----------------
(1) The winding up of a company may be either—
(a) by the 1[Tribunal]; or
(b) voluntary; 2[***]
3[***]
(2) The provisions of this Act with respect to winding up apply, unless the contrary appears, to the winding up of a company in any of those modes.
-----------------------------------------
1. Subs. by Act 11 of 2003, sec. 48, for “Court”.
2. The word “or” omitted by Act 11 of 2003, sec. 48.
3. Clause (c) omitted by Act 11 of 2003, sec. 48.
--------------
(1) In the event of a company being wound up, every present and past member shall be liable to contribute to the assets of the company to an amount sufficient for payment of its debts and liabilities and the costs, charges and expenses of the winding up, and for the adjustment of the rights of the contributories among themselves, subject to the provisions of section 427 and subject also to the following qualifications, namely:—
(a) a past member shall not be liable to contribute if he has ceased to be a member for one year or upwards before the commencement of the winding up;
(b) a past member shall not be liable to contribute in respect of any debt or liability of the company contracted after he ceased to be a member;
(c) no past member shall be liable to contribute unless it appears
In the winding up of a limited company, any director 2[***] or manager, whether past or present, whose liability is, under the provisions of this Act, unlimited, shall, in addition to his liability, if any, to contribute as an ordinary member, be liable to make a further contribution as if he were, at the commencement of the winding up, a member of an unlimited company:
Provided that—
(a) a past director 2[***] or manager shall not be liable to make such further contribution, if he has ceased to hold office for a year or upwards before the commencement of the winding up;
(b) a past director 2[***] or manager shall not be liable to make such further contribution in respect of any debt or liability of the company contracted after he ceased to hold office;
&
The term “contributory” means every person liable to contribute to the assets of a company in the event of its being wound up, and includes the holder of any shares which are fully paid up; and for the purposes of all proceedings for determining, and all proceedings prior to the final determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory.
(1) The liability of a contributory shall create a debt accruing due from him at the time when his liability commenced, but payable at the times specified in calls made on him for enforcing the liability.
(2) No claim founded on the liability of a contributory shall be cognizable by any Court of Small Causes sitting outside the presidency-towns.
(1) If a contributory dies either before or after he has been placed on the list of contributories, his legal representatives shall be liable in a due course of administration, to contribute to the assets of the company in discharge of his liability, and shall be contributories accordingly.
(2) If the legal representatives make default in paying any money ordered to be paid by them, proceedings may be taken for administering the estate of the deceased contributory and compelling payment thereout of the money due.
(3) For the purposes of this section, where the deceased contributory was a member of a Hindu joint family governed by the Mitakshara School of Hindu Law, his legal representatives shall be deemed to include the surviving coparceners.
If a contributory is adjudged insolvent, either before or after he has been placed on the list of contributories,—
(a) his assignees in insolvency shall represent him for all the purposes of the winding up, and shall be contributories accordingly, and may be called on to admit to proof against the estate of the insolvent, or otherwise to allow to be paid out of his assets in due course of law, any money due from the insolvent in respect of his liability to contribute to the assets of the company; and
(b) there may be proved against the estate of the insolvent the estimated value of his liability to future calls as well as calls already made.
If a body corporate which is a contributory is ordered to be wound up, either before or after it has been placed on the list of contributories,—
(a) the liquidator of the body corporate shall represent it for all the purposes of the winding up of the company and shall be a contributory accordingly, and may be called on to admit to proof against the assets of the body corporate, or otherwise to allow to be paid out of its assets in due course of law, any money due from the body corporate in respect of its liability to contribute to the assets of the company; and
(b) there may be proved against the assets of the body corporate the estimated value of its liability to future calls as well as calls already made.
A company may be wound up by the Tribunal,—
(a) if the company has, by special resolution, resolved that the company be wound up by the Tribunal;
(b) if default is made in delivering the statutory report to the Registrar or in holding the statutory meeting;
(c) if the company does not commence its business within a year from its incorporation, or suspends its business for a whole year;
(d) if the number of members is reduced, in the case of a public company, below seven, and in the case of a private company, below two;
(e) if the company is unable to pay its debts;
(f) if the Tribunal is of the opinion that it is just and equitable that the co
(1) A company shall be deemed to be unable to pay its debts—
(a) if a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding 1 [one lakh rupees] then due, has served on the company, by causing it to be delivered at its registered office, by registered post or otherwise, a demand under his hand requiring the company to pay the sum so due and the company has for three weeks thereafter neglected to pay the sum, or to secure or compound for it to the reasonable satisfaction of the creditor;
(b) if execution or other process issued on a decree or order of 2 [any Court or Tribunal] in favour of a creditor of the company is returned unsatisfied in whole or in part; or
(c) if it is proved to the satisfaction of the 3[Tribunal] that the company is unable to pay its
[Rep. by the Companies (Second Amendment) Act, 2002, sec. 53.]
[Rep. by the Companies (Second Amendment) Act, 2002, sec. 53.]
[Rep. by the Companies (Second Amendment) Act, 2002, sec. 53.]
[Rep. by the Companies (Second Amendment) Act, 2002, sec. 53.]
(1) An application to the 1[Tribunal] for the winding up of a company shall be by petition presented, subject to the provisions of this section,—
(a) by the company; or
(b) by any creditor or creditors, including any contingent or prospective creditor or creditors; or
(c) by any contributory or contributories; or
(d) by all or any of the parties specified in clauses (a), (b) and (c), whether together or separately; or
(e) by the Registrar; or
(f) in a case falling under section 243, by any person authorised by the Central Government in that behalf.
2[(g) in a case falling under clause (h) of sect
(1) Every company shall file with the Tribunal a statement of its affairs along with the petition for winding up.
(2) Where a company oppose a petition for its winding up, it shall file with the Tribunal a statement of its affairs.
(3) The statement of affairs referred to in sub-section (1) or sub-section (2) shall be accompanied by—
(a) the last known address of all directors and company secretary of such company;
(b) the details of location of assets of the company and their value;
(c) the details of all debtors and creditors with their complete addresses;
(d) the details of workmen and other employees and any amount outstanding to them;
(1) Where a company is being wound up voluntarily, a petition for its winding up by the Tribunal may be presented by—
(a) any person authorised to do so under section 439; or
(b) the Official Liquidator.
(2) The Tribunal shall not make a winding up order on a petition presented to it under sub-section (1), unless it is satisfied that the voluntary winding up cannot be continued with due regard to the interests of the creditors or contributories or both.]
------------------------------
1. Subs. by Act 11 of 2003, sec. 56, for section 440.
------------------------------
(1) Where, before the presentation of a petition for the winding up of a company by the Tribunal, a resolution has been passed by the company for voluntary winding up, the winding up of the company shall be deemed to have commenced at the time of the passing of the resolution, and unless the Tribunal, on proof of fraud or mistake, thinks fit to direct otherwise, all proceedings taken in the voluntary winding up shall be deemed to have been validly taken.
(2) In any other case, the winding up of a company by the Tribunal shall be deemed to commence at the time of the presentation of the petition for the winding up.]
-----------------------------
1. Subs. by Act 11 of 2003, sec. 56, for section 441.
&nbs
(1) There shall be levied and collected, for the purposes of rehabilitation or revival or protection of assets of the sick industrial company, a levy by way of cess at such rate not less than 0.005 per cent. and not more than 0.1 per cent. on the value of annual turnover of every company or its annual gross receipt, whichever is more as the Central Government may, from time to time, specify by notification in the Official Gazette.
(2) Every company shall pay to the Central Government the cess referred to in sub-section (1) within three months from the close of every financial year.
(3) Every company shall furnish, in such form as may be prescribed, to the Central Government and the Tribunal the details of its turnover and gross receipts with payment of cess under sub-section (1).
(4) The Centr
The proceeds of the cess levied and collected under section 441A shall first be credited to the Consolidated Fund of India and the Central Government may, if Parliament by appropriation made by law in this behalf so provides, pay to the Tribunal, from time to time, out of such proceeds (after deducting the cost of collection), such sums of money as it may think fit for being utilised for the purposes of the Fund.
(1) There shall be formed for the purposes of rehabilitation or revival or protection of assets of a sick industrial company, a Fund to be called the Rehabilitation and Revival Fund.
(2) There shall be credited to the Fund—
(a) all amounts paid under section 441B;
(b) any amount given as grants by the Central Government for the purposes of this Fund;
(c) any amount given to the Fund from any other source;
(d) any income from investment of the amount in the Fund.
(e) amount refunded by the company under section 441G.
The Fund shall be applied by the Tribunal for the purpose of—
(a) making interim payment of workmen’s dues pending the revival or rehabilitation of the sick industrial company; or
(b) payment of workmen’s dues due to the workmen, referred to in sub-section (3) of section 529, of the sick industrial company; or
(c) protection of assets of sick industrial company; or
(d) revival or rehabilitation of sick industrial company;
which in the opinion of the Tribunal are necessary or expedient for the said purposes.
The Central Government or Tribunal may require any company to furnish for the purposes of rehabilitation or revival or protection of assets of sick industrial companies, such statistical and other information in such form and within such period as may be prescribed.
(1) If any cess payable by a company under section 441A is not paid in accordance with the provisions of that section, it shall be deemed to be in arrears and the same shall be recovered by the Tribunal in such manner as may be prescribed.
(2) The Tribunal may, after such inquiry as it deems fit, impose on the company, which is in arrears under sub-section (1), a penalty not exceeding ten times the amount in arrears:
Provided that before imposing such penalty, such company shall be given a reasonable opportunity of being heard, and if, after such hearing, the Tribunal is satisfied that the default was for any good and sufficient reason, no penalty shall be imposed under this sub-section.
(1) Where the fund has been applied by the Tribunal for any of the purposes specified in clauses (a) to (d) of section 441D, such amount of fund shall be recovered from the company after its revival or rehabilitation or out of sale proceeds of its assets after discharging the statutory liabilities and payment of dues to creditors.
(2) The amount referred to in sub-section (1) shall be recovered in the manner as the Tribunal may direct.]
[Rep. by the Companies (Second Amendment) Act, 2002, sec. 59.]
(1) On hearing a winding up petition, the Tribunal may—
(a) dismiss it, with or without costs; or
(b) adjourn the hearing conditionally or unconditionally; or
(c) make any interim order that it thinks fit; or
(d) make an order for winding up the company with or without costs, or any other order that it thinks fit:
Provided that the Tribunal shall not refuse to make a winding up order on the ground only that the assets of the company have been mortgaged to an amount equal to or in excess of those assets, or that the company has no assets.
(2) Where the petition is presented on the ground tha
Where the Tribunal makes an order for the winding up of the company, the Tribunal, shall within a period not exceeding two weeks from the date of passing of the order, cause intimation thereof to be sent to the Official Liquidator and the Registrar.]
-------------------------------
1. Subs. by Act 11 of 2003, sec. 60, for section 444.
-------------------------------
(1) On the making of a winding up order, it shall be the duty of the petitioner in the winding up proceedings and of the company to file with the Registrar a certified copy of the order, within 1[thirty days] from the date of the making of the order.
If default is made in complying with the foregoing provision, the petitioner, or as the case may require, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to 2[one thousand rupees] for each day during which the default continues.
3[(1A) In computing the period of 4[thirty days] from the date of the making of a winding up order under sub-section (1) the time requisite for obtaining a certified copy of the order shall be excluded.]
(2) On the filing of a certified copy of the winding up
(1) When a winding up order has been made or the Official Liquidator has been appointed as provisional liquidator, no suit or other legal proceeding shall be commenced, or if pending at the date of the winding up order, shall be proceeded with, against the company, except by leave of the 1[Tribunal] and subject to such terms as the 1[Tribunal] may impose. Legal Comments "Introduction" - Section 446 of the Companies Act, 1956 governs stay and management of suits and proceedings involving a company that is winding up or under official liquidation; it centralizes control in the Company Court to safeguard assets and prevent multiplicity of actions. [011000178?] Note: drawn from multiple case summaries indicating Section 446 context. "What Section 446 Says" - Section 446(1) prohibits initiation or continuation of suits or other legal proceedings against a company in liquidation except with leave of the Tribunal (Company Court) and subject to terms; Section 446(2) expands the power to include recovery by or against the company and related matters, with leave requirements. [Sharon Solutions Limited, Chennai VS Edelweiss Asset Reconstruction Company Limited, Mumbai][Balwinder Singh VS Rajendra Singh Chahal] "Essential ingredients" - (i) existence of a company in liquidation or under official liquidation; (ii) a pending or proposed suit/proceeding by or against the company; (iii) need for leave of the Court; (iv) condition that leave may impose terms; (v) applicability of limitation rules to such applications. [Balwinder Singh VS Rajendra Singh Chahal][ANAND FINANCE PRIVATE LIMITED VS AMRIT DASARAT KAKADE][Kochupoly VS Holy Family Chits And Loans Pvt Ltd] "Scope of Section" - Applies to suits, proceedings, claims by or against the company (including branches), and matters arising in winding up; governs transfer of pending matters to the Company Court; overrides other laws only to the extent recognized (e.g., certain statutes like RDDBFI Act may have special jurisdiction). [Balwinder Singh VS Rajendra Singh Chahal][BANK OF INDIA VS LUK AUTO ANCILLARY (INDIA) LIMITED][PIRLESS GENERAL FINANCE AND INVESTMENT CO. LTD. ,UTTAR PRADESH FINANCIAL CORPORATION VS MAJESTIC APPARELS PRIVATE LIMITED] "Leave to Sue – General Rule" - Leave is mandatory to proceed against a company in liquidation; failure to obtain leave renders proceedings voidable and may require stay or dismissal; leave can be granted after institution in certain circumstances, and may be issued with conditions. [CHINA TRUST COMMERCIAL BANK VS LILLIPUT KIDSWEAR LTD. ][Integrated Finance Ltd. VS Official Liquidator, Rohan Stampings P. Ltd. ] "Leave to Sue – Revocation / Non-disclosure / Fraud" - If leave was sought or granted on false or inadequate material, or fraud is involved in the process, leave can be revoked or proceedings stayed/dismissed. [THOMAS COOK INDIA LIMITED VS HINDUSTAN THEREMO PRINTS LIMITED (IN LIQUIDATION)][KULVIR CHANDHOKE VS EASTERN LINKERS PRIVATE LIMITED. (IN LIQUIDATION)] "Leave to Prosecute Writ / Prosecute Guarantor" - Writ petitions or prosecutorial actions against a company in liquidation may require leave; guarantors and other parties to suit must be given notice and heard in leave proceedings as per rules; rights of secured creditors and guarantors are recognized. [In Re. Rajasthan State Agro VS . ][Ajit Talukdar VS State Of Bihar] "Effect on Civil/Other Courts" - Section 446 acts as a stay and transfers control to the Company Court; other statutory regimes (e.g., RDDBFI Act) may override or interact, leading to possible transfer of cases to tribunals or courts with appropriate jurisdiction. [BANK OF INDIA VS LUK AUTO ANCILLARY (INDIA) LIMITED][STATE BANK OF INDIA VS AVON AUTOMOTIVE COMPONENTS PRIVATE LIMITED] "Official Liquidator – Asset Management" - Official Liquidator must manage assets, prevent dissipation, and may be empowered to de-seal properties, appoint local commissioners, and enforce possession; acts against liquidation orders can be contended as contempt or require leave. [CHINA TRUST COMMERCIAL BANK VS LILLIPUT KIDSWEAR LTD. ][Integrated Finance Ltd. VS Official Liquidator, Rohan Stampings P. Ltd. ] "Sale of Assets & Priority of Creditors" - Court approval is needed for sale/transfer of assets; decisions must consider creditors’ interests (unsecured, secured) and maximize value; sale in liquidation may be set aside if procedure or notice is flawed. [In the matter of: M/s SARAF PAPER MILLS LTD (IN LIQUIDATION) THROUGH OFFICIAL LIQUIDATOR VS . ][Ist Petitioner VS Ist Respondent] "Limitation & Time-Bar" - Applications under Section 446 are subject to limitation rules; Article 137 of the Limitation Act applies to proceedings by the Official Liquidator; limitation periods may run for leave applications and related reliefs. [Kochupoly VS Holy Family Chits And Loans Pvt Ltd][Adoni Solvents (P)Ltd. , Official Liquidator, High Court of A. P. VS A. P. State Financial Corporation] "Interaction with Other Statutes" - Section 446 interacts with other statutory regimes (e.g., SFR Corporation Act, N.I.Act provisions, MRTP Act, IBC 2016) and may yield to exclusive jurisdiction of tribunals in some contexts; cross-border or cross-act issues require careful statutory reading. [BANK OF INDIA VS LUK AUTO ANCILLARY (INDIA) LIMITED][Board Of Trustees Of Port Mumbai VS Barge Madhwa] "Criminal Proceedings" - The scope of “other legal proceedings” includes criminal proceedings only if they relate to the assets of the company; criminal actions not tied to assets may not be stayed under Section 446. [M/S. Pennar Paterson Ltd. VS M/s. Shikshak Sahakari Bank Ltd. ][Poly K. Ayyampally VS A. Pradeep Kumar] "Penalties for Violation" - Interfering with Official Liquidator’s possession or sealing assets can constitute contempt of court and attract imprisonment or fines under Section 446; proper conduct and compliance are essential. [Integrated Finance Ltd. VS Official Liquidator, Rohan Stampings P. Ltd. ] "Preservation of Rights of Creditors" - Leave provisions preserve creditors’ interests, ensuring that liquidation outcomes reflect priority and distributions under the applicable framework; court should protect unsecured creditors’ equities on confirmation of sale. [In the matter of: M/s SARAF PAPER MILLS LTD (IN LIQUIDATION) THROUGH OFFICIAL LIQUIDATOR VS . ] "Leave Procedure – Notices" - Leave applications must involve notice to Official Liquidator and parties to the suit; failure to give notice may render leave process defective, potentially affecting enforceability. [Sahu Jain Ltd. VS Rohtas Industries Ltd. ][Integrated Finance Ltd. VS Official Liquidator, Rohan Stampings P. Ltd. ] "Transfer of Cases to Higher Courts" - In some contexts, Section 446, along with RDDBFI Act provisions, can cause cases to be transferred from Company Court to High Court or tribunals; the governing statute’s priority controls. [BANK OF INDIA VS LUK AUTO ANCILLARY (INDIA) LIMITED][STATE BANK OF INDIA VS AVON AUTOMOTIVE COMPONENTS PRIVATE LIMITED] "Winding-Up – Decree Enforceability" - Orders of the Company Court under 446(2)(b) can be treated as a decree for enforcement by filing certified copies; enforceability is tied to the leave order. [ANAND FINANCE PRIVATE LIMITED VS AMRIT DASARAT KAKADE] "Practical Guidance" - When representing creditors or companies, verify (a) wind-up status, (b) need for leave, (c) whether the proceeding concerns assets or non-asset claims, (d) notice obligations, (e) potential for transfer or stay, and (f) interplay with other statutes and limitation rules. [Balwinder Singh VS Rajendra Singh Chahal][CHINA TRUST COMMERCIAL BANK VS LILLIPUT KIDSWEAR LTD. ] "Key Precedents Illustrating Scope" - Authorities repeatedly emphasize that leave under Section 446 is a gatekeeping device to centralize litigation during liquidation; failure to obtain leave can render proceedings voidable or require stay; leave decisions are fact-specific, balancing interests of creditors and the company. [In Re. Rajasthan State Agro VS . ][KULVIR CHANDHOKE VS EASTERN LINKERS PRIVATE LIMITED. (IN LIQUIDATION)] "Practical Outcome" - The Court’s exercise of Section 446 seeks to prevent wasteful litigation, protect asset realization, and ensure orderly distribution among creditors; scenarios include stay/leave, transfer of cases, and permission to proceed with writs or appeals against the liquidation company. [Balwinder Singh VS Rajendra Singh Chahal][In the matter of: M/s SARAF PAPER MILLS LTD (IN LIQUIDATION) THROUGH OFFICIAL LIQUIDATOR VS . ] "Note on Source Limitations" - The cited sources collectively discuss Section 446’s applications in varied fact patterns (fraudulent transfers, pensions, possession, bank recoveries, etc.). Where precise factual details are missing, points are framed on the general doctrinal holdings evident in the sources. [See provided source set]
2[(2) 3[Tribunal] shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of—
(a) any suit or proceeding by or against the company;
(b) any claim made by or against the company (including claims by or against any of its branches in India);
(c) any application made under section 391 by or in respect of the company;
The directors and other officers of every company shall ensure that books of account of the company are completed and audited upto date of winding up order made by the Tribunal and submitted to it at the cost of the company, failing which such directors and officers shall be liable for punishment for a term not exceeding one year and fine for an amount not exceeding one lakh rupees.]
----------------------------
1. Ins. by Act 11 of 2003, sec. 62.
----------------------------
An order for winding up a company shall operate in favour of all the creditors and of all the contributories of the company as if it has been made on the joint petition, of a creditor and of a contributory.
(1) For the purposes of this Act, so far as it relates to the winding up of a company by the Tribunal, there shall be an Official Liquidator who—
(a) may be appointed from a penal of professional firms of chartered accountants, advocates, company secretaries, costs and works accountants or firms having a combination of these professions, which the Central Government shall constitute for the Tribunal; or
(b) may be a body corporate consisting of such professionals as may be approved by the Central Government from time to time; or
(c) may be a whole-time or a part-time officer appointed by the Central Government:
Provided that, before appointing the Official Liquidator, the Tribunal may give due regard to the views or opinion of the secured c
On a winding up order being made in respect of a company, the Official Liquidator shall, by virtue of his office, become the liquidator of the company.
(1) At any time after the presentation of a winding up petition and before the making of a winding up order, the 1[Tribunal] may appoint the Official Liquidator to be liquidator provisionally.
(2) Before appointing a provisional Liquidator, the 1[Tribunal] shall give notice to the company and give a reasonable opportunity to it to make its representations, if any, unless, for special reasons to be recorded in writing, the 1[Tribunal] thinks fit to dispense with such notice.
(3) Where a provisional liquidator is appointed by the 1[Tribunal], the 1[Tribunal] may limit and restrict his powers by the order appointing him or by a subsequent order, but otherwise he shall have the same powers as a liquidator.
(4) The Official Liquidator shall cease to hold office as provisional liquidator, and shall
(1) The liquidator shall conduct the proceedings in winding up the company and perform such duties in reference thereto as the 1[Tribunal] may impose.
(2) Where 2[the Official liquidator referred to in clause (c) of sub-section (1) of section 448] becomes or acts as liquidator, there shall be paid to the Central Government out of the assets of the company such fees as may be prescribed.
(3) The acts of a liquidator shall be valid, notwithstanding any defect that may afterwards be discovered in his appointment or qualification:
Provided that nothing in this sub-section shall be deemed to give validity to acts done by a liquidator after his appointment has been shown to be invalid.
-----------------------
A liquidator shall be described by the style of “The Official Liquidator” of the particular company in respect of which he acts, and not by his individual name.
A receiver shall not be appointed of assets in the hands of a liquidator except by, or with the leave of, the 1[Tribunal].
------------------------------
1. Subs. by Act 11 of 2003, sec. 66, for “Court”.
------------------------------
(1) Where the 1[Tribunal] has made a winding up order or appointed the Official Liquidator as provisional liquidator, unless the 1[Tribunal] in its discretion otherwise orders, there shall be made out and submitted to the Official Liquidator a statement as to the affairs of the company in the prescribed form, verified by an affidavit, and containing the following particulars, namely:—
(a) the assets of the company, stating separately the cash balance in hand and at the bank, if any, and the negotiable securities, if any, held by the company;
(b) its debts and liabilities;
(c) the names, residences and occupations of its creditors, stating separately the amount of secured and unsecured debts; and in the case of secured debts, particulars of the securities given, whether by the company
(1) In a case where a winding up order is made, the Official Liquidator shall, as soon as practicable after receipt of the statement to be submitted under section 454 and not later than six months from the date of the order, 1 [or such extended period as may be allowed by the Court] or in a case where the 2 [Tribunal] orders that no statement need be submitted, as soon as practicable after the date of the order, submit a preliminary report to the 2[Tribunal]—
(a) as to the amount of capital issued, subscribed, and paid up, and the estimated amount of assets and liabilities, giving separately under the heading of assets, particulars of (i) cash and negotiable securities; (ii) debts due from contributories; (iii) debts due to the company and securities if any, available in respect thereof; (iv) movable and immovable properties belonging to the company; and (v) unpaid calls;
&nbs
(1) Where a winding up order has been made or where a provisional liquidator has been appointed, the liquidator 1[or the provisional liquidator, as the case may be,] shall take into his custody or under his control, all the property, effects and actionable claims to which the company is or appears to be entitled.
1[(1A) For the purpose of enabling the liquidator or the provisional liquidator, as the case may be, to take into his custody or under his control, any property, effects or actionable claims to which the company is or appears to be entitled, the liquidator or the provisional liquidator, as the case may be, may by writing request the Chief Presidency Magistrate or the District Magistrate within whose jurisdiction such property, effects or actionable claims or any books of account or other documents of the company may be found, to take possession thereof, and the Chief Presi
(1) The liquidator in a winding up by the 1[Tribunal] shall have power, with the sanction of the 2[Tribunal],—
(a) to institute or defend any suit, prosecution, or other legal proceeding, civil or criminal, in the name and on behalf of the company;
(b) to carry on the business of the company so far as may be necessary for the beneficial winding up of the company;
(c) to sell the immovable and movable property and actionable claims of the company by public auction or private contract, with power to transfer the whole thereof to any person or body corporate, or to sell the same in parcels;
3[(ca) to sell whole to the undertaking of the company as a going concern;]
(d) to rise on the security
The 1[Tribunal] may, by order, provide that the liquidator may exercise any of the powers referred to in sub-section (1) of section 457 without the sanction or intervention of the 1[Tribunal]:
Provided always that the exercise by the liquidator of such powers shall be subject to the control of the 1[Tribunal].
-------------------------------
1. Subs. by Act 11 of 2003, sec. 68, for “Court”.
-------------------------------
Notwithstanding anything in the Indian Limitation Act, 1908 (9 of 1908) or in any other law for the time being in force, in computing the period of limitation prescribed for any suit or application in the name and on behalf of a company which is being wound up by the 2[Tribunal], the period from the date of commencement of the winding up of the company to the date on which the winding up order is made (both inclusive) and a period of one year immediately following the date of the winding up order shall be excluded.]
------------------------------
1. Ins. by Act 65 of 1960, sec. 171 (w.e.f. 28-12-1960).
2. Subs. by Act 11 of 2003, sec. 68, for “Court”.
-------------------------------
The liquidator may, with the sanction of the Tribunal, appoint one or more chartered accountants or company secretaries or cost accountants or legal practitioners entitled to appear before the Tribunal under section 10GD to assist him in the performance of his duties.]
-------------------------------
1. Subs. by Act 11 of 2003, sec. 69, for section 459.
-------------------------------
(1) Subject to the provisions of this Act, the liquidator shall, in the administration of the assets of the company and the distribution thereof among its creditors, have regard to any directions which may be given by resolution of the creditors or contributories at any general meeting or by the committee of inspection.
(2) Any directions given by the creditors or contributories at any general meeting shall, in case of conflict, be deemed to override any directions given by the committee of inspection.t
(3) The liquidator—
(a) may summon general meetings of the creditors or contributories, whenever he thinks fit, for the purpose of ascertaining their wishes;
(b) shall summon such meetings at such times, as the creditors or contributories, as t
(1) The liquidator shall keep, in the manner prescribed, proper books in which he shall cause entries or minutes to be made of proceedings at meetings and of such other matters as may be prescribed.
(2) Any creditor or contributory may, subject to the control of the 1[Tribunal], inspect any such books, personally or by his agent.
-------------------------------
1. Subs. by Act 11 of 2003, sec. 70, for “Court”.
-------------------------------
(1) The liquidator shall, at such times as may be prescribed but not less than twice in each year during his tenure of office, present to the 1[Tribunal] an account of his receipts and payments as liquidator.
(2) The account shall be in the prescribed form, shall be made in duplicate, and shall be verified by a declaration in the prescribed form.
(3) The 1[Tribunal] shall cause the account to be audited in such manner as it thinks fit; and for the purpose of the audit, the liquidator shall furnish the 1[Tribunal] with such vouchers and information as the 1[Tribunal] may require, and the 1[Tribunal] may, at any time, require the production of, and inspect, any books or accounts kept by the liquidator.
(4) When the account has been audited, one copy thereof shall be filed and kept by the 1[Tribu
(1) The Central Government shall take cognizance of the conduct of liquidators of companies which are being wound up by the 1[Tribunal], and, if a liquidator does not faithfully perform his duties and duly observe all the requirements imposed on him by this Act 2[or by the Indian Companies Act, 1913 (7 of 1913)], the rules thereunder, or otherwise, with respect to the performance of his duties, or if any compliant is made to the Central Government by any creditor or contributory in regard thereto, the Central Government shall inquire into the matter, and take such action thereon as it may think expedient:
2[Provided that where the winding up of a company has commenced before the commencement of this Act, the 1[Tribunal] may, on the application of the Central Government, appoint in place of such liquidator the Official Liquidator as the liquidator in such winding up.]
2[(1) (a) The 1[Tribunal] may, at the time of making an order for the winding up of a company or at any time thereafter, direct that there shall be appointed a committee of inspection to act with the liquidator.
(b) Where a direction is given by the 1[Tribunal] as aforesaid, the liquidator shall, within two months from the date of such direction, convene a meeting of the creditors of the company (as ascertained from its books and documents) for the purpose of determining who are to be members of the committee.]
3[(2) The liquidator shall, within fourteen days from the date of the creditors’ meeting or such further time as the 1[Tribunal] in its discretion may grant for the purpose, convene a meeting of the contributories to consider the decision of the creditors’ meeting with respect to the membership of the committee; and it shall be op
(1) A committee of inspection appointed in pursuance of section 464 shall consist of not more than twelve members, being creditors and contributories of the company or persons holding general or special powers of attorney from creditors or contributories, in such proportions as may be agreed on by the meetings of creditors and contributories, or in case of difference of opinion between the meetings, as may be determined by the 1[Tribunal].
(2) The committee of inspection shall have the right to inspect the accounts of the liquidator at all reasonable times.
(3) The committee shall meet at such times as it may from time to time appoint, 2[***] and the liquidator or any member of the committee may also call a meeting of the committee as and when he thinks necessary.
(4) The quorum for a meeting
(1) The Tribunal may at any time after making a winding up order, on the application either of the Official Liquidator or of any creditor or contributory, and on proof to the satisfaction of the Tribunal that all proceedings in relation to the winding up ought to be stayed, make an order staying the proceedings, either altogether or for a limited time, on such terms and conditions as the Tribunal thinks fit.
(2) On any application under this section, the Tribunal may, before making an order, require the Official Liquidator to furnish to the Tribunal a report with respect to any facts or matters which are in his opinion relevant to the application.
(3) A copy of every order made under this section shall forthwith be forwarded by the company, or otherwise as may be prescribed, to the Registrar, who shall make a minute of the order in his b
(1) As soon as may be after making a winding up order, the 1[Tribunal] shall settle a list of contributories, with power to rectify the register of members in all cases where rectification is required in pursuance of this Act, and shall cause the assets of the company to be collected and applied in discharge of its liabilities:
Provided that, where it appears to the 1[Tribunal] that it will not be necessary to make calls on, or adjust the rights of, contributories, the 1[Tribunal] may dispense with the settlement of a list of contributories.
(2) In settling the list of contributories, the 1[Tribunal] shall distinguish between those who are contributories in their own right and those who are contributories as being representatives of, or liable for the debts of, others.
&
The 1[Tribunal] may, at any time after making a winding up order, require any contributory for the time being on the list of contributories, and any trustee, receiver, banker, agent, 2[officer or other employee] of the company, to pay, deliver, surrender or transfer forthwith or within such time as the 1[Tribunal] directs, to the liquidator, any money, property or books and papers 3[in his custody or under his control] to which the company is prima facie entitled.
-------------------------
1. Subs. by Act 11 of 2003, sec. 73, for “Court”.
2. Subs. by Act 65 of 1960, sec. 175, for “or officer” (w.e.f. 28-12-1960).
3. Subs. by Act 65 of 1960, sec. 175, for “in his hands” (w.e.f. 28-12
(1) The 1[Tribunal] may, at any time after making a winding up order, make an order on any contributory for the time being on the list of contributories to pay, in the manner directed by the order, any money due to the company, from him or from the estate of the person whom he represents, exclusive of any money payable by him or the estate by virtue of any call in pursuance of this Act.
(2) The 1[Tribunal], in making such an order, may—
(a) in the case of an unlimited company, allow to the contributory, by way of set-off, any money due to him or to the estate which he represents, from the company, on any independent dealing or contract with the company, but not any money due to him as a member of the company in respect of any dividend or profit; and
(b) in the case of a limited company,
(1) The Tribunal may, at any time after making a winding up order, and either before or after it has ascertained the sufficiency of the assets of the company,—
(a) make calls on all or any of the contributories for the time being on the list of the contributories, to the extent of their liability, for payment of any money which the Tribunal considers necessary to satisfy the debts and liabilities of the company, and the costs, charges and expenses of winding up, and for the adjustment of the rights of the contributories among themselves; and
(b) make an order for payment of any calls so made.
(2) In making a call, the Tribunal may take into consideration the probability that some of the contributories may, partly or wholly, fail to pay the call.]
&n
(1) The 1[Tribunal] may order any contributory, purchaser or other person from whom any money is due to the company to pay the money into the public account of India in the Reserve Bank of India instead of to the liquidator.
(2) Any such order may be enforced in the same manner as if the 1[Tribunal] had directed payment to the liquidator.
-----------------------------
1. Subs. by Act 11 of 2003, sec. 75, for “Court”.
-----------------------------
All moneys, bills, hundis, notes and other securities paid or delivered into the Reserve Bank of India in the course of the winding up of a company by the Tribunal, shall be subject in all respects to the orders of the Tribunal.]
-----------------------------
1. Subs. by Act 11 of 2003, sec. 76, for section 472.
-----------------------------
(1) An order made by the 1[Tribunal] on a contributory shall, subject to any right to appeal, be conclusive evidence that the money, if any, thereby appearing to be due or ordered to be paid is due.
(2) All other pertinent matters stated in the order shall be taken to be truly stated as against all persons and in all proceedings whatsoever.
-----------------------------
1. Subs. by Act 11 of 2003, sec. 77, for “Court”.
-----------------------------
The 1[Tribunal] may fix a time or times within which creditors are to prove their debts or claims, or to be excluded from the benefit of any distribution made before those debts or claims are proved.
-----------------------------
1. Subs. by Act 11 of 2003, sec. 77, for “Court”.
-----------------------------
The 1[Tribunal] shall adjust the rights of the contributories among themselves, and distribute any surplus among the persons entitled thereto.
-----------------------------
1. Subs. by Act 11 of 2003, sec. 77, for “Court”.
-----------------------------
The 1[Tribunal] may, in the event of the assets being insufficient to satisfy the liabilities, make an order for the payment out of the assets, of the costs, charges and expenses incurred in the winding up, in such order of priority inter se as the 1[Tribunal] thinks just.
-----------------------------
1. Subs. by Act 11 of 2003, sec. 77, for “Court”.
-----------------------------
(1) The 1[Tribunal] may, at any time after the appointment of a provisional liquidator or the making of a winding up order summon before it any officer of the company or person known or suspected to have in his possession any property or books or papers, of the company or known or suspected to be indebted to the company, or any person whom the 1[Tribunal] deems capable of giving information concerning the promotion, formation, trade, dealings, property, books or papers or affairs of the company.
(2) The 1[Tribunal] may examine any officer or person so summoned on oath concerning the matters aforesaid, either by word of mouth or on written interrogatories; and may, in the former case, reduce his answers to writing and require him to sign them.
(3) The 1[Tribunal] may require any officer or person so summoned to produce any books and paper
(1) When an order has been made for winding up a company by the 1[Tribunal], and the Official Liquidator has made a report to the 1[Tribunal] under this Act, stating that in his opinion a fraud has been committed by any person in the promotion or formation of the company, or by any officer of the company in relation to the company since its formation, the 1[Tribunal] may, after considering the report, direct that that person or officer shall attend before the 1[Tribunal] on a day appointed by it for that purpose, and be publicly examined as to the promotion or formation or the conduct of the business of the company, or as to his conduct and dealings as an officer thereof.
(2) The Official Liquidator shall take part in the examination, and for that purpose may, if specially authorized by the 1[Tribunal] in that behalf, employ such legal assistance as may be sanctioned by the 1[Tribu
At any time either before or after making a winding up order, the 1[Tribunal] may, on proof of probable cause for believing that a contributory is about to quit India or otherwise to abscond, or is about to remove or conceal any of his property, for the purpose of evading payment of calls or of avoiding examination respecting the affairs of the company, cause—
(a) the contributory to be arrested and safely kept until such time as the 1[Tribunal] may order; and
(b) his books and papers and movable property to be seized and safely kept until such time as the 1[Tribunal] may order.
-----------------------------------------
1. Subs. by Act 11 of 2003, sec. 79, for “Court”.
Any powers conferred on the Tribunal by this Act shall be in addition to, and not in derogation of, any existing powers of instituting proceedings against any contributory or debtor of the company, or the estate of any contributory or debtor, for the recovery of any call or other sums.]
-----------------------------------------
1. Subs. by Act 11 of 2003, sec. 80, for section 480.
-----------------------------------------
(1) When the affairs of a company have been completely wound up 1[or when the 2[Tribunal] is of the opinion that the liquidator cannot proceed with the winding up of a company for want of funds and assets or for any other reason whatsoever and it is just and reasonable in the circumstances of the case that an order of dissolution of the company should be made], the 2[Tribunal] shall make an order that the company be dissolved from the date of the order, and the company shall be dissolved accordingly.
(2) A copy to the order shall within 3[thirty] days from the date thereof, be forwarded by the liquidator to the Registrar who shall make in his books a minute of the dissolution of the company.
(3) If the liquidator makes default in forwarding a copy as aforesaid, he shall be punishable with fine which may extend to 4[five hundred rupees] f
Any order made by a Court for, or in the course of, winding up a company shall be enforceable at any place in India, other than that over which such Court has jurisdiction, by the Court which would have had jurisdiction in respect of the company if its registered office had been situate at such other place, and in the same manner in all respects as if the order had been made by that Court.
Appeals from 1[any order made or decision given before the commencement of the Companies (Second Amendment) Act, 2002], in the matter of the winding up of a company by the Court shall lie to the same Court to which, in the same manner in which, and subject to the same conditions under which, appeals lie from any order or decision of the Court in cases within its ordinary jurisdiction.
-----------------------------------------
1. Subs. by Act 11 of 2003, sec. 82, for “any order made, or decision given”.
-----------------------------------------
(1) A company may be wound up voluntarily—
(a) when the period, if any, fixed for the duration of the company by the articles has expired, or the event, if any, has occurred, on the occurrence of which the articles provide that the company is to be dissolved, and the company in general meeting passes a resolution requiring the company to be wound up voluntarily;
(b) if the company passes a special resolution that the company be wound up voluntarily.
(2) In this Act, the expression “a resolution for voluntary winding up” means a resolution passed under clause (a) or (b) of sub-section (1).
(1) When a company has passed a resolution for voluntary winding up, it shall, within fourteen days of the passing of the resolution, give notice of the resolution by advertisement in the Official Gazette, and also in some newspaper circulating in the district where the registered office of the company is situate.
(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 1[five hundred rupees] for every day during which the default continues.
For the purposes of this sub-section, a liquidator of the company shall be deemed to be an officer of the company.
------------------------------
A voluntary winding up shall be deemed to commence at the time when the resolution for voluntary winding up is passed.
In the case of a voluntary winding up, the company shall from the commencement of the winding up, cease to carry on its business, except so far as may be required for the beneficial winding up of such business:
Provided that the corporate state and corporate powers of the company shall continue to till it is dissolved.
(1) Where it is proposed to wind up a company voluntarily, its directors, or in case the company has more than two directors, the majority of the directors, may, at a meeting of the Board, make a declaration verified by an affidavit, to the effect that they have made a full inquiry into the affairs of the company, and that, having done so, they have formed the opinion that the company has no debts, or that it will be able to pay its debts in full within such period not exceeding three years from the commencement of the winding up as may be specified in the declaration.
(2) A declaration made as aforesaid shall have no effect for the purposes of this Act, unless—
(a) it is made within the five weeks immediately preceding the date of the passing of the resolution for winding up the company and is delivered to the Registrar for registrat
The provisions contained in sections 490 to 498, both inclusive shall subject to the provisions of section 498, apply in relation to a members’ voluntary winding up.
(a) appoint one or more liquidators for the purpose of winding up the affairs and distributing the assets of the company; and
(b) fix the remuneration, if any, to be paid to the liquidator or liquidators.
(2) Any remuneration so fixed shall not be increased in any circumstances whatever, whether with or without the sanction of the 1[Tribunal].
(3) Before the remuneration of the liquidator or liquidators is fixed, as aforesaid, the liquidator, or any of the liquidators, as the case may be, shall not take charge of his office.
---------------------------------
1. Subs. by Act 11 of 2003, sec. 83, for “Court”.
On the appointment of a liquidator, all the powers of the Board of directors and of the managing or whole-time directors 1[***] and manager, if there be any of these, shall cease except for the purpose of giving notice of such appointment to the registrar in pursuance of section 493 or insofar as the company in general meeting or the liquidator may sanction the continuance thereof.
---------------------------------
1. The words “, managing agent, secretaries and treasurers,” omitted by Act 53 of 2000, sec. 194 (w.e.f. 13-12-2000).
---------------------------------
(1) If a vacancy occurs by death, resignation or otherwise in the office of any liquidator appointed by the company, the company in general meeting may, subject to any arrangement with its creditors, fill the vacancy.
(2) For that purpose, a general meeting may be convened by any contributory, or by the continuing liquidator or liquidators, if any.
(3) The meeting shall be held in the manner provided by this Act or by the articles, or in such other manner as the 1[Tribunal] may, on application by any contributory or by the continuing liquidator or liquidators, determine.
---------------------------------
1. Subs. by Act 11 of 2003, sec. 83, for “Court”.
&nbs
(1) The company shall give notice to the Registrar of the appointment of a liquidator or liquidators made by it under section 490, of every vacancy occurring in the office of liquidator, and of the name of the liquidator or liquidators appointed to fill every such vacancy under section 492.
(2) The notice aforesaid shall be given by the company within ten days of the event to which it relates.
(3) If default is made in complying with sub-section (1) or (2), the company, and every officer of the company (including every liquidator or continuing liquidator) who is in default, shall be punishable with fine which may extend to 1[one thousand rupees] for every day during which the default continues.
---------------------------------
&nbs
(1) Where—
(a) a company (in this section called “the transferor company”) is proposed to be, or is in course of being, wound up altogether voluntarily; and
(b) the whole or any part of its business or property is proposed to be transferred or sold to another company, whether a company within the meaning of this Act or not (in this section called “the transferee company”),
the liquidator of the transferor company may, with the sanction of a special resolution of that company conferring on the liquidator either a general authority or an authority in respect of any particular arrangement,—
(i) receive, by way of compensation or part compensation for the transfer or sale, shares, policies, or other like interests in the transferee company, for
(1) If, in the case of a winding up commenced after the commencement of this Act, the liquidator is at any time of opinion that the company will not be able to pay its debts in full within the period stated in the declaration under section 488, or that period has expired without the debts having been paid in full, he shall forthwith summon a meeting of the creditors, and shall lay before the meeting a statement of the assets and liabilities of the company.
(2) If the liquidator fails to comply with such-section (1), he shall be punishable with fine which may extend to 1[five thousand rupees].
-----------------------------
1. Subs. by Act 53 of 2000, sec. 196, for “five hundred rupees” (w.e.f. 13-12-2000).
&n
(1) Subject to the provisions of section 498, in the event of the winding up continuing for more than one year, the liquidator shall—
(a) call a general meeting of the company at the end of the first year from the commencement of the winding up, and at the end of each succeeding year, or as soon thereafter as may be convenient within three months from the end of the year or such longer period as the Central Government may allow; and
(b) lay before the meeting an account of his acts and dealings and of the conduct of the winding up during the preceding year, together with a statement in the prescribed form and containing the prescribed particulars with respect to the proceedings in, and position of, the liquidation.
(2) If the liquidator fails to comply with sub-section (1) he shall be pu
(1) Subject to the provisions of section 498, as soon as the affairs of the company are fully wound up, the liquidator shall—
(a) make up an account of the winding up, showing how the winding up has been conducted and the property of the company has been disposed of; and
(b) call a general meeting of the company for the purpose of laying the account before it, and giving any explanation thereof.
(2) The meeting shall be called by advertisement—
(b) published not less than one month before the meeting in the Official Gazette, and also in some newspaper circulating in the district where the registered office of the company is situate.
(3) Within one week after the meeting, the liquidator shall send
Where section 495 has effect sections 508 and 509 shall apply to the winding up, to the exclusion of sections 496 and 497, as if the winding up were a creditors’ voluntary winding up and not a members’ voluntary winding up:
Provided that the liquidator shall not be required to call a meeting of creditors under section 508 at the end of the first year from the commencement of the winding up, unless the meeting held under section 495 has been held more than three months before the end of that year.
The provisions contained in sections 500 to 509, both inclusive, shall apply in relation to a creditors’ voluntary winding up.
(1) The company shall cause a meeting of the creditors of the company to be called for the day, or the day next following the day, on which there is to be held the general meeting of the company at which the resolution for voluntary winding up is to be proposed, and shall cause notices of the meeting of creditors to be sent by post to the creditors simultaneously with the sending of the notices of the meeting of the company.
(2) The company shall cause notice of the meeting of the creditors to be advertised once at least in the Official Gazette and once at least in two newspapers circulating in the district where the registered office or principal place of business of the company is situate.
(3) The Board of directors of the company shall—
(a) cause a full statement of the position of the c
(1) Notice of any resolution passed at a creditors’ meeting in pursuance of section 500 shall be given by the company to the Registrar within ten days of the passing thereof.
(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 1[five hundred rupees] for every day during which the default continues.
For the purposes of this section, a liquidator of the company shall be deemed to be an officer of the company.
-------------------------------
1. Subs. by Act 53 of 2000, sec. 200, for “fifty rupees” (w.e.f. 13-12-2000).
------------------
(1) The creditors and the company at their respective meetings mentioned in section 500 may nominate a person to be liquidator for the purpose of winding up the affairs and distributing the assets of the company.
(2) If the creditors and the company nominate different persons the person nominated by the creditors shall be liquidator:
Provided that any director, member or creditor of the company may, within seven days after the date on which the nomination was made by the creditors, apply to the 1[Tribunal] for an order either directing that the person nominated as liquidator by the company shall be liquidator instead of or jointly with the person nominated by the creditors, or appointing the Official Liquidator or some other person to be liquidator instead of the person appointed by the creditors.
&
(1) The creditors at the meeting to be held in pursuance of section 500 or at any subsequent meeting may, if they think fit, appoint a committee of inspection consisting of not more than five persons.
(2) If such a committee is appointed, the company may, either at the meeting at which the resolution for voluntary winding up is passed or at any subsequent general meeting, appoint such number of persons (not exceeding five) as they think fit to act as members of the committee:
Provided that the creditors may, if they think fit, resolve that all or any of the persons so appointed by the company ought not to be members of the committee of inspection.
(3) If the creditors so resolve, the persons mentioned in the resolution shall not, unless the 1[Tribunal] otherwise directs, be qualified to act as
(1) The committee of inspection, or if there is no such committee, the creditors, may fix the remuneration to be paid to the liquidator or liquidators.
(2) Where the remuneration is not so fixed, it shall be determined by the 1[Tribunal].
(3) Any remuneration fixed under sub-section (1) or (2) shall not be increased in any circumstances whatever, whether with or without the sanction of the 1[Tribunal].
------------------------------
1. Subs. by Act 11 of 2003, sec. 86, for “Court”.
On the appointment of a liquidator, all the powers of the Board of directors shall cease, except insofar as the committee of inspection, or if there is no such committee, the creditors in general meeting, may sanction the continuance thereof.
If a vacancy occurs by death, resignation or otherwise, in the office of a liquidator (other than a liquidator appointed by, or by the direction of, the 1[Tribunal]), the creditors in general meeting may fill the vacancy.
------------------------------
1. Subs. by Act 11 of 2003, sec. 86, for “Court”.
------------------------------
The provisions of section 494 shall apply in the case of a creditors’ voluntary winding up as in the case of a members’ voluntary winding up, with the modification that the powers of the liquidator under that section shall not be exercised except with the sanction either of the 1[Tribunal] or of the committee of inspection.
------------------------------
1. Subs. by Act 11 of 2003, sec. 86, for “Court”.
------------------------------
(1) In the event of the winding up continuing for more than one year, the liquidator shall—
(a) call a general meeting of the company and a meeting of the creditors at the end of the first year from the commencement of the winding up and at the end of each succeeding year, or as soon thereafter as may be convenient within three months from the end of the year or such longer period as the Central Government may allow; and
(b) lay before the meetings an account of his acts and dealings and of the conduct of the winding up during the preceding year, together with a statement in the prescribed form and containing the prescribed particulars with respect to the proceedings in, and position of, the winding up.
(2) If the liquidator fails to comply with sub-section (1) he shall be punishable, in
(1) As soon as the affairs of the company are fully wound up, the liquidator shall—
(a) make up an account of the winding up, showing how the winding up has been conducted and the property of the company has been disposed of; and
(b) call a general meeting of the company and a meeting of the creditors for the purpose of laying the account before the meetings and giving any explanation thereof.
(2) Each such meeting shall be called by advertisement—
(a) specifying the time, place and object thereof; and
(b) published not less than one month before the meeting in the Official Gazette and also in some newspapers circulating in the district where the registered office of the company is situate.
The provisions contained in sections 511 to 521, both inclusive, shall apply to every voluntary winding up, whether a members’ or a creditors’ winding up.
Subject to the provisions of this Act as to preferential payments, the assets of a company shall, on its winding up be applied in satisfaction of its liabilities pari passu and subject to such application, shall, unless the articles otherwise provide, be distributed among the members according to their rights and interests in the company.
The provisions of section 454 shall, so far as may be, apply to every voluntary winding up as they apply to the winding up by the 2[Tribunal] except that references to—
(a) the 2[Tribunal] shall be omitted;
(b) the Official Liquidator or the provisional liquidator shall be construed as references to the liquidator; and
(c) the “relevant date” shall be construed as references to the date of commencement of the winding up.]
--------------------
1. Ins. by Act 31 of 1965, sec. 56 (w.e.f. 15-10-1965).
2. Subs. by Act 11 of 2003, sec. 88, for “Court”.
-
(1) The liquidator may,—
(a) in the case of a members’ voluntary winding up, with the sanction of a special resolution of the company, and in the case of a creditors’ voluntary winding up, with the sanction of the 1[Tribunal] or, the committee of inspection or, if there is no such committee, of a meeting of the creditors, exercise any of the powers given by 2[clauses (a) to (d) of sub-section (1)] of section 457 to a liquidator in a winding up by the 1[Tribunal];
(b) without the sanction referred to in clause (a), exercise any of the other powers given by this Act to the liquidator in a winding up by the 1[Tribunal];
(c) exercise the power of the 1[Tribunal] under this Act of settling a list of contributories (which shall be prima facie evidence of the liability of the persons named t
(1) A body corporate shall not be qualified for appointment as liquidator of a company in a voluntary winding up.
(2) Any appointment made in contravention of sub-section (1) shall be void.
(3) Any body corporate which acts as liquidator of a company and very director 1[***] or a manager thereof shall be punishable with fine which may extend to 2[ten thousand rupees].
3[Provided that, notwithstanding anything contained in any other law for the time being in force, a body corporate consisting of such professionals as may be approved by the Central Government from time to time, shall be qualified for appointment as Official Liquidator under section 448.]
---------------------------
&n
Any person who gives or agrees or offers to give, to any member or creditor of a company any gratification whatever with a view to—
(a) securing his own appointment or nomination as the company’s liquidator; or
(b) securing or preventing the appointment or nomination of some person other than himself, as the company’s liquidator,
shall be punishable with fine which may extend to 1[ten thousand rupees].
---------------------------
1. Subs. by Act 53 of 2000, sec. 204, for “one thousand rupees” (w.e.f. 13-12-2000).
---------------------------
(1) If from any cause whatever, there is no liquidator acting, the Tribunal may appoint the Official Liquidator or any other person as a liquidator.there is no liquidator acting, the Tribunal may appoint the Official Liquidator or any other person as a liquidator."
(2) The Tribunal may, on cause shown, remove a liquidator and appoint the Official Liquidator or any other person as a liquidator in place of the removed liquidator.
(3) The Tribunal may also appoint or remove a liquidator on the application made by the Registrar in this behalf.
(4) If the Official Liquidator is appointed as liquidator under the proviso to sub-section (2) of section 502 or under this section, the remuneration to be paid to him shall be fixed by the Tribunal and shall be credited to the Central Government.]
(1) The liquidator shall, within 1[thirty] days after his appointment, publish in the Official Gazette, and deliver to the Registrar for registration, a notice of his appointment in the from prescribed.
(2) If the liquidator fails to company with sub-section (1), he shall be punishable with fine which may extend to 2[five hundred rupees] for every day during which the default continues.
---------------------------
1. Subs. by Act 31 of 1965, sec. 62 and Sch., for “twenty-one” (w.e.f. 15-10-1965).
2. Subs. by Act 53 of 2000, sec. 205, for “fifty rupees” (w.e.f. 13-12-2000).
---------------------------
(1) Any arrangement entered into between a company about to be, or in the course of being, wound up and its creditors shall, subject to the right of appeal under this section, be binding on the company and on the creditors if it is sanctioned by a special resolution of the company and acceded to by three-fourths in number and value of the creditors.
(2) Any creditor or contributory may, within three weeks from the completion of the arrangement, appeal to the 1[Tribunal] against it and the 1[Tribunal] may thereupon, as it thinks just, amend, vary, confirm or set aside the arrangement.
---------------------------
1. Subs. by Act 11 of 2003, sec. 91, for “Court”.
---------------------------
(1) The liquidator or any contributory or creditor may apply to the Tribunal,—
(a) to determine any question arising in the winding up of a company; or
(b) to exercise, as respects the enforcing of calls, the staying of proceedings or any other matter, all or any of the powers which the Tribunal might exercise if the company were being wound up by the Tribunal.
(2) The liquidator or any creditor or contributory may apply to the Tribunal for an order setting aside any attachment, distress or execution put into force against the estate or effects of the company after the commencement of the winding up.
(3) The Tribunal, if satisfied on an application under sub-section (1) or sub-section (2) that the determination of the question or the required
(1) The liquidator may make a report to the Tribunal stating that in his opinion a fraud has been committed by any person in the promotion or formation of the company or by any officer of the company in relation to the company since its formation; and the Tribunal may, after considering the report, direct that that person or officer shall attend before the Tribunal on a day appointed by it for that purpose, and be publicly examined as to the promotion or formation or the conduct of the business of the company, or as to his conduct and dealings as officer thereof.
(2) The provisions of sub-sections (2) to (11) of section 478 shall apply in relation to any examination directed under sub-section (1) as they apply in relation to an examination directed under sub-section (1) of section 478 with references to the liquidator being substituted for references to the Official Liquidator in t
All costs, charges and expenses properly incurred in the winding up, including the remuneration of the liquidator, shall, subject to the rights of secured creditors, if any, be payable out of the assets of the company in priority to all other claims.
[Rep. by the Companies (Amendment) Act, 1960 (65 of 1960), sec. 181 (w.e.f. 28-12-1960).]
[Rep. by the Companies (Second Amendment) Act, 2002, sec. 93.]
[Rep. by the Companies (Second Amendment) Act, 2002, sec. 93.]
[Rep. by the Companies (Second Amendment) Act, 2002, sec. 93.]
[Rep. by the Companies (Second Amendment) Act, 2002, sec. 93.]
[Rep. by the Companies (Second Amendment) Act, 2002, sec. 93.]
[Rep. by the Companies (Second Amendment) Act, 2002, sec. 93.]
In every winding up (subject, in the case of insolvent companies, to the application in accordance with the provisions of this Act of the law of insolvency), all debts payable on a contingency, and all claims against the company, present or future, certain or contingent, ascertained or sounding only in damages, shall be admissible to proof against the company, a just estimate being made, so far as possible, of the value of such debts or claims as may be subject to any contingency; or may sound only in damages, or for some other reason may not bear a certain value.
(1) In the winding up of an insolvent company, the same rules shall prevail and be observed with regard to—
(a) debts provable;
(b) the valuation of annuities and future and contingent liabilities; and
(c) the respective rights of secured and unsecured creditors; as are in force for the time being under the law of insolvency with respect to the estates of persons adjudged insolvent:
1[Provided that the security of every secured creditor shall be deemed to be subject to a pari passu charge in favour of the workmen to the extent of the workmen’s portion therein, and, where a secured creditor, instead of relinquishing his security and proving his debt, opts to realise his security,—
(a) the liqui
Notwithstanding anything contained in any other provision of this Act or any other law for the time being in force, in the winding up of a company—
(a) workmen’s dues; and
(b) debts due to secured creditors to the extent such debts rank under clause (c) of the proviso to sub-section (1) of section 529 pari passu with such dues,
shall be paid in priority to all other debts.
(2) The debts payable under clause (a) and clause (b) of sub-section (1) shall be paid in full, unless the assets are insufficient to meet them, in which case they shall abate in equal proportions.]
----------------------------
1. In
(1) In a winding up 1[subject to the provisions of section 529A, there shall be paid] in priority to all other debts—
(a) all revenues taxes, cesses and rates due from the company to the Central or a State Government or to a local authority at the relevant date as defined in clause (c) of sub-section (8), and having become due and payable within the twelve months next before that date;
(b) all wages or salary (including wages payable for time or piece work and salary earned wholly or in part by way of commission) of any employee, in respect of services rendered to the company and due for a period not exceeding four months within the twelve months next before the relevant date 2[***] subject to the limit specified in sub-section (2);
(c) all accrued holiday remuneration becoming payabl
(1) Any transfer of property, movable or immovable, delivery of goods, payment, execution or other act relating to property made, taken or done by or against a company within six months before the commencement of its winding up which, had it been made, taken or done by or against an individual within three months before the presentation of an insolvency petition on which he is adjudged insolvent, would be deemed in his insolvency a fraudulent preference, shall in the event of the company being wound up, be deemed a fraudulent preference of its creditors and be invalid accordingly:
Provided that, in relation to things made, taken or done before the commencement of this Act, this sub-section shall have effect with the substitution, for the reference to six months, of a reference to three months.
(2) For the purposes of sub-section (1), the
Any transfer of property movable or immovable, or any delivery of goods, made by a company, not being a transfer or delivery made in the ordinary course of its business or in favour of a purchaser or encumbrancer in good faith and for valuable consideration, if made within a period of one year before the presentation of a petition for winding up by 2[the Tribunal] or the passing of a resolution for voluntary winding up of the company, shall be void against the liquidator.]
---------------------------
1. Ins. by Act 65 of 1960, sec. 185 (w.e.f. 28-12-1960).
2. Subs. by Act 11 of 2003, sec. 94, for “or subject to the supervision of the Court”.
---------------------------
Any transfer or assignment by a company of all its property to trustees for the benefit of all its creditors shall be void.
(1) Where, in the case of a company which is being wound up, anything made, taken or done after the commencement of this Act is invalid under section 531 as a fraudulent preference of a person interested in property mortgaged or charged to secure the company’s debt, then (without prejudice to any rights or liabilities arising apart from this provisions), the person preferred shall be subject to the same liabilities, and shall have the same rights, as if he had undertaken to be personally liable as surety for the debt, to the extent of the mortgage or charge on the property or the value of his interest, whichever is less.
(2) The value of the said person’s interest shall be determined as at the date of the transaction constituting the fraudulent preference, and shall be determined as if the interest were free of all encumbrances other than those to which the mortgage or charge for t
Where a company is being wound up, a floating charge on the undertaking or property of the company created within the twelve months immediately preceding the commencement of the winding up, shall, unless it is proved that the company immediately after the creation of the charge was solvent, be invalid, except to the amount of any cash paid to the company at the time of, or subsequently to the creation of, and in consideration for, the charge, together with interest on that amount at the rate of five per cent. per annum or such other rate as may for the time being be notified by the Central Government in this behalf in the Official Gazette:
Provided that in relation to a charge created more than three months before the commencement of this Act, this section shall have effect with the substitution, for references to twelve months of references to three months.
(1) Where any part of the property of a company which is being wound up consists of—
(a) land of any tenure, burdened with onerous covenants;
(b) shares or stock in companies;
(c) any other property which is unsaleable or is not readily saleable, by reason of its binding the processor thereof either to the performance of any onerous act or to the payment of any sum of money; or
(d) unprofitable contracts,
the liquidator of the company, notwithstanding that he has endeavoured to sell or has taken possession of the property, or exercised any act of ownership in relation thereto, or done anything in pursuance of the contract, may, with the leave of the 1[Tribunal] and subject to the provisions of
(1) In the case of a voluntary winding up, any transfer of shares in the company, not being a transfer made to or with the sanction of the liquidator and any alteration in the status of the members of the company made after the commencement of the winding up, shall be void.
(2) In the case of a winding up by 1[the Tribunal], any disposition of the property (including actionable claims) of the company, and any transfer of shares in the company or alteration in the status of its members, made after the commencement of the winding up, shall 2[unless the Tribunal] otherwise orders, be void.
---------------------------
1. Subs. by Act 11 of 2003, sec. 96, for “or subject to the supervision of the Court”.
&n
(1) Where any company is being wound up by Tribunal—
(a) any attachment, distress or execution put in force, without leave of the Tribunal against the estate or effects of the company, after the commencement of the winding up; or
(b) any sale held, without leave of the Tribunal of any of the properties or effects of the company after such commencement]
shall be void.
(2) Nothing in this section applies to any proceedings for the recovery of any tax or impost or any dues payable to the Government.]
---------------------------
1. Subs. by Act 11 of 2003, sec. 97, for section 537.
&nb
(1) If any person, being a past or present officer of a company, which, at the time of the commission of the alleged offence, is being wound up, whether by 1[the Tribunal] or voluntarily, or which is subsequently ordered to be wound up 2[by the Tribunal] or which subsequently passes a resolution for voluntary winding up,—
(a) does not, to the best of his knowledge and belief, fully and truly discover to the liquidator all the property, movable and immovable, of the company, and how and to whom and for what consideration and when the company disposed of any part thereof, except such part as has been disposed of in the ordinary course of the business of the company;
(b) does not deliver up to the liquidator, or as he directs, all such parts of the movable and immovable property of the company as is in his custody or under his control
If with intent to defraud or deceive any person, any officer or contributory of a company which is being wound up—
(a) destroys mutilates, alters, falsifies or secretes, or is privy to the destruction, mutilation, alteration, falsification or secreting of, any books, papers or securities; or
(b) makes, or is privy to the making of, any false or fraudulent entry in any register, book of account or document belonging to the company,
he shall be punishable with imprisonment for a term which may extend to seven years, and shall also be liable to fine.
If any person, being at the time of the commission of the alleged offence an officer of a company which is subsequently ordered to be wound up by the 1[Tribunal] or which subsequently passes a resolution for voluntary winding up,—
(a) has, by false pretences or by means of any other fraud, induced any person to give credit to the company; or
(b) with intent to defraud creditors of the company, has made or caused to be made any gift or transfer of or charge on, or has caused or connived at the levying of any execution against, the property of the company; or
(c) with intent to defraud creditors of the company, has concealed or removed any part of the property of the company since the date of any unsatisfied judgment or order for payment of money obtained against the company, or within
(1) Where a company is being wound up, if it is shown that proper books of account were not kept by the company throughout the period of two years immediately preceding the commencement of the winding up, or the period between the incorporation of the company and the commencement of the winding up, whichever is shorter, every officer of the company who is in default shall, unless he shows that he acted honestly and that in the circumstances in which the business of the company was carried on, the default was excusable, be punishable with imprisonment for a term which may extend to one year.
(2) For the purposes of sub-section (1), it shall be deemed that proper books of account have not been kept in the case of any company, if there have not been kept—
(a) such books or accounts as are necessary to exhibit and explain the transactions
(1) If in the course of the winding up of a company, it appears that any business of the company has been carried on, with intent to defraud creditors of the company or any other persons or for any fraudulent purpose, the 1[Tribunal], on the application of the Official Liquidator, or the liquidator or any creditor or contributory of the company, may, if it thinks it proper so to do, declare that any persons who were knowingly parties to the carrying on of the business in the manner aforesaid shall be personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company as the 1[Tribunal] may direct.
On the hearing of an application under this sub-section, the Official Liquidator or the liquidator, as the case may be, may himself give evidence or call witnesses.
(2) (a) Where the 1[Tr
(1) If in the course of winding up of a company, it appears that any person who has taken part in the promotion or formation of the company, or any past or present director, manager, liquidator or officer of the company—
(a) has misapplied, or retained, or become liable or accountable for, any money or property of the company; or
(b) has been guilty of any misfeasance or breach of trust in relation to the company;
the Tribunal may, on the application of the Official Liquidator, or the liquidator, or of any creditor or contributory, made within the time specified in that behalf in sub-section (2), examine into the conduct of the person, director, manager, liquidator or officer aforesaid, and compel him to repay or restore the money or property or any part thereof respectively, with intere
Where a declaration under section 542 or an order under section 543 is or may be made in respect of a firm or body corporate, the 1[Tribunal] shall also have power to make a declaration under section 542, or pass an order under section 543, as the case may be, in respect of any person who was at the relevant time a partner in that firm or a director of that body corporate.
----------------------------
1. Subs. by Act 11 of 2003, sec. 101, for “Court”.
----------------------------
(1) If it appears to the 1[Tribunal] in the course of a winding up by, 2[the Tribunal], that any past or present officer, or any member, of the company has been guilty of any offence in relation to the company, the 3[Tribunal] may, either on the application of any person interested in the winding up or of its own motion, direct the liquidator either himself to prosecute the offender or to refer the matter to the Registrar.
(2) If it appears to the liquidator in the course of a voluntary winding up that any past or present officer, or any member, of the company has been guilty of an offence in relation to the company he shall forthwith report the matter to the Registrar and shall furnish to him such information and give to him such access to and facilities for inspecting and taking copies of any books and papers, being information or books and papers in the possession or under the c
(1) The liquidator may—
(a) with the 1[sanction of the Tribunal], when the company is being wound up by 2[the Tribunal]; and
(b) with the sanction of a special resolution of the company, in the case of a voluntary winding up,—
(i) pay any classes of creditors in full;
(ii) make any compromise or arrangement with creditors or persons claiming to be creditors, or having or alleging themselves to have any claim, present or future, certain or contingent, ascertained or sounding only in damages, against the company, or whereby the company may be rendered liable; or
(iii) compromise any call or liability to call, debt, and liability capable of resulting in a debt, and any claim, present or future
(1) Where a company is being wound up, whether by 1[the Tribunal] or voluntarily, every invoice, order for goods or business letter issued by or on behalf of the company or a liquidator of the company, or a receiver or manager of the property of the company, being a document on or in which the name of the company appears, shall contain a statement that the company is being wound up.
(2) If default is made in complying with this section, the company, and every one of the following persons who wilfully authorises or permits the default, namely any officer of the company, any liquidator of the company and any receiver or manager, shall be punishable with fine which may extend to 2[five thousand rupees].
----------------------------------
1. Su
Where a company is being wound up, all books and papers of the company and of the liquidators shall, as between the contributories of the company be prima facie evidence of the truth of all matters purporting to be therein recorded.
(1) At any time after the making of an order for the winding up of a company by 1[the Tribunal], any creditor or contributory of the company may, if 2[the Supreme Court], by rules prescribed so permit and in accordance with and subject to such rules but not further or otherwise, inspect the books and papers of the company.
(2) Nothing in sub-section (1) shall be taken as excluding or restricting any rights conferred by any law for the time being in force—
(a) on the Central or a State Government; or
(b) on any authority or officer thereof; or
(c) on any person acting under the authority of any such Government or of any such authority or officer.
----
(1) When the affairs of a company have been completely wound up and it is about to be dissolved, its books and papers and those of the liquidator may be disposed of as follows, that is to say:—
1[(a) in the case of a winding up by the Tribunal, in such manner as the Tribunal directs;]
(b) in the case of a member’s voluntary winding up, in such manner as the company by special resolution directs; and
(c) in the case of a creditor’s voluntary winding up, in such manner as the committee of inspection or, if there is no such committee, as the creditors of the company may direct.
(2) After the expiry of five years from the dissolution of the company, no responsibility shall rest on the company, the liquidator, or any person to whom the custody o
1[(1) If the winding up of a company is not concluded within one year after its commencement, the liquidator shall, unless he is exempted from so doing either wholly or in part by the Central Government, within two months of the expiry of such year and thereafter until the winding up is concluded, at intervals of not more than one year or at such shorter intervals if any, as may be prescribed, file a statement in the prescribed form and containing the prescribed particulars duly audited, by a person qualified to act as auditor of the company, with respect to the proceedings in, and position of, the liquidation,—
2[(a) in the case of a winding up by the Tribunal, in Tribunal; and]
(b) in the case of a voluntary winding up, with the Registrar:
Provided that no such audit as is referred to
Every Official Liquidator shall, in such manner and at such times as may be prescribed, pay the moneys received by him as liquidator of any company, into the public account of India in the Reserve Bank of India.
(1) Every liquidator of a company, not being an Official Liquidator shall, in such manner and at such times as may be prescribed, pay the moneys received by him in his capacity as such into a Scheduled Bank to the credit of a special banking account opened by him in that behalf, and called “the Liquidation Account of .......................... Company Limited/Company Private Limited/Company”:
Provided that if the 1[Tribunal] is satisfied that for the purpose of carrying on the business of the company or of obtaining advances or for any other reason, it is to the advantage of the creditors or contributories that the liquidator should have an account with any other bank, the 1[Tribunal] may authorise the liquidator to make his payments into or out of such other bank as the 1[Tribunal] may select; and thereupon those payments shall be made in the prescribed manner and at the prescribe
Neither the Official Liquidator nor any other liquidator of a company shall pay any moneys received by him in his capacity as such into any private banking account.
1[(1) Where any company is being wound up, if the liquidator has in his hands or under his control any money representing—
(a) dividends payable to any creditor which had remained un-paid for six months after the date on which they were declared, or
(b) assets refundable to any contributory which have remained undistributed for six months after the date on which they became refundable,
the liquidator shall forthwith pay the said money into the public account of India in the Reserve Bank of India in a separate account to be known as the Company’s Liquidation Account.]
(2) The liquidator shall, on the dissolution of the company, similarly pay into the said account any money representing 2[unpaid] dividends or undistributed assets in his hands at
(1) If any liquidator who has made any default in filing, delivering or making any return, account or other document, or in giving any notice which he is by law required to file, deliver, make or give fails to make good the default within fourteen days after the service on him of a notice requiring him to do so, the 1[Tribunal] may, on an application made to the 1[Tribunal] by any contributory or creditor of the company or by the Registrar, make an order directing the liquidator to make good the default within such time as may be specified in the order.
(2) Any such order may provide that all costs of and incidental to the application shall be borne by the liquidator.
(3) Nothing in this section shall be taken to prejudice the operation of any enactment imposing penalties on a liquidator in respect of any such default as aforesaid.
&n
(1) In all matters relating to the winding up of a company, the 1 [Tribunal] may—
(a) have regard to the wishes of creditors or contributories of the company, as proved to it by any sufficient evidence;
(b) if it thinks fit for the purpose of ascertaining those wishes direct meetings of the creditors or contributories to be called, held and conducted in such manner as the 1 [Tribunal] directors; and
(c) appoint a person to act as chairman of any such meeting and to report the result thereof to the1 [Tribunal] .
(2) When ascertaining the wishes of creditors, regard shall be had to the value of each creditors debt.
(3) When ascertaining the wishes of contributories, regard shall be had to the number of
(1) Any affidavit, required to be sworn under the provisions, or for the purposes of this Part may be sworn—
(a) in India, before any 1[Court or the Tribunal], Judge or person lawfully authorised to take and receive affidavits; and
(b) in any other country, either before any Court, Judge or person lawfully authorised to take and receive affidavits in that country or before an Indian Consul or Vice-Consul.
2[***]
(2) 3[All Courts, Tribunal], Judges, Justices, Commissioners and persons acting judicially in India shall take judicial notice of the seal, stamp or signature, as the case may be, of any 4[such Court, Tribunal] Judge, person, Consul or Vice-Consul, attached appended or subscribed to any such affidavit or to any other document to be use
(1) Where a company has been dissolved, whether in pursuance of this Part or of section 394 or otherwise, the 1[Tribunal] may at any time within two years of the date of the dissolution on application by the liquidator of the company or by any other person who appears to the 1[Tribunal] to be interested, make an order, upon such terms as the 1[Tribunal] thinks fit, declaring the dissolution to have been void; and thereupon such proceedings may be taken as might have been taken if the company had not been dissolved.
(2) It shall be the duty of the person on whose application the order was made, within 2[thirty] days after the making of the order or such further time as the 1[Tribunal] may allow, to file a certified copy of the order with the Registrar who shall register the same; and if such person fails so to do, he shall be punishable with fine which may extend to 3[five hundred r
(1) Where the Registrar has reasonable cause to believe that a company is not carrying on business or in operation, he shall send to the company by post a letter inquiring whether the company is carrying on business or in operation.
(2) If the Registrar does not within one month of sending the letter receive any answer thereto, he shall, within fourteen days after the expiry of the month, send to the company by post a registered letter referring to the first letter, and stating that no answer thereto has been received and that, if an answer is not received to the second letter within one month from the date thereof, a notice will be published in the Official Gazette with a view to striking the name of the company off the register.
(3) If the Registrar either receives an answer from the company to the effect that it is not carrying on bus
This Act shall apply to existing companies as follows:—
(a) in the case of a limited company other than a company limited by guarantee, this Act shall apply in the same manner as if the company had been formed and registered under this Act as a company limited by shares;
(b) in the case of a company limited by guarantee, this Act shall apply in the same manner as if the company had been formed and registered under this Act as a company limited by guarantee; and
(c) in the case of a company other than a limited company, this Act shall apply in the same manner as if the company had been formed and registered under this Act as an unlimited company:
Provided that—
(i) nothing in Table A in Schedul
This Act shall apply to every company registered but not formed under any previous companies law in the same manner as it is in Part IX of this Act declared to apply to companies registered but not formed under this Act:
Provided that reference, express or implied, to the date of registration shall be construed as a reference to the date at which the company was registered under the previous companies law concerned.
This Act shall apply to every unlimited company registered as a limited company in pursuance of any previous companies law, in the same manner as it applies to an unlimited company registered in pursuance of this Act as a limited company:
Provided that reference, express or implied, to the date of registration shall be construed as a reference to the date at which the company was registered as a limited company under the previous companies law concerned.
A company registered under Act 19 of 1857 and Act 7 of 1860 or either of them may cause its shares to be transferred in the manner hitherto in use, or in such other manner as the company may direct.
( 1 ) With the exceptions and subject to the provisions contained in this section-
(a) any company consisting of seven or more me mbers, which was in existence on the first day of May, 1882 , including any company registered under Act No. 19 of 1857 and Act No. 7 of 1860 or either of them or under any laws or law in force in a Part B State, corresponding to those Acts or either of them; and
(b) any company formed after the date aforesaid, whether before or after the commencement of this Act, in pursuance of any Act of Parliament other than this Act or of any other Indian law (including a law in force in a Part B State), or of any Act of Parliament of the United Kingdom or Letters Patent in force in India, or being otherwise duly constituted according to law, and consisting of seven or more me mbers;
(1) For the purposes of this Part, so far as it relates to me registration of companies as companies limited by shares, a joint-stock company means a company having a permanent paid up or nominal share capital of fixed amount divided into shares, also of fixed amount, or held and transferable as stock or divided and held partly in the one way and partly in the other, and formed on the principle of having for its members the holders of those shares or that stock, and no other persons.
(2) Such a company, when registered with limited liability under this Act, shall be deemed to be a company limited by shares.
Before the registration in pursuance of this Part of a joint-stock company, there shall be delivered to the Registrar the following documents:—
(a) a list showing the names, addresses and occupations of all persons who on a day named in the list, not being more than six clear days before the day of registration, were members of the company, with the addition of the shares or stock held by them respectively, distinguishing, in cases where the shares are numbered, each share by its number;
(b) a copy of any Act of Parliament or other Indian law, Act of Parliament of the United Kingdom, Royal Charter, Letters Patent, deed of settlement, deed of partnership or other instrument constituting or regulating the company; and
(c) if the company is intended to be registered as a limited company, a statem
Requirements for registration of companies not being "joint-stock companies"
The lists of members and directors and any other particulars relating to the company required to be delivered to the Registrar shall be duly verified by the declaration of any two or more directors or other principal officers of the company.
The Registrar may require such evidence as he thinks necessary for the purpose of satisfying himself whether any company proposing to be registered is or is not a joint-stock company as defined in section 566.
(1) Where a banking company which was in existence on the first day of May, 1882, proposes to register as a limited company under this Part, it shall, at least thirty days before so registering, give notice of its intention so to register, to every person who has a banking account with the company, either by delivery of the notice to him, or by posting it to him at, or delivering it at, his last known address.
(2) If the banking company omits to give the notice required by sub-section (1), then, as between the company and the person for the time being interested in the account in respect of which the notice ought to have been given, and so far as respects the account down to the time at which notice is given, but not further or otherwise, the certificate of registration with limited liability shall have no operation.
Where the name of a company seeking registration under this Part is one which in the opinion of the Central Government is undesirable, the company may, with the approval of the Central Government signified in writing, change its name with effect from the date of its registration under this Part:
Provided that the like assent of the members of the company shall be required to the change of name as is required by section 565 to the registration of the company under this Part.
When a company registers in pursuance of this Part with limited liability, the word "Limited" or the words "Private Limited" as the case may be, shall form, and be registered as, the last word or words of its name:
Provided that this section shall not be deemed to exclude the operation of section 25.
On compliance with the requirements of this Part with respect to registration, and on payment of such fees, if any, as are payable under Schedule X, the Registrar shall certify under his hand that the company applying for registration is incorporated as a company under this Act, and in the case of a limited company that it is limited and thereupon the company shall be so incorporated.
All property, movable and immovable (including actionable claims), belonging to or vested in a company at the date of its registration in pursuance of this Part, shall, on such registration, pass to and vest in the company as incorporated under this Act for all the estate and interest of the company therein.
The registration of a company in pursuance of this Part shall not affect its rights or liabilities in respect of any debt or obligation incurred, or any contract entered into, by, to, with, or on behalf of, the company before registration.
All suits and other legal proceedings taken by or against the company, or any public officer or member thereof, which are pending at the time of the registration of a company in pursuance of this Part, may be continued in the same manner as if the registration had not taken place:
Provided that execution shall not issue against the property or person of any individual member of the company on any decree or order obtained in any such suit or proceeding; but, in the event of the property of the company being insufficient to satisfy the decree or order, an order may be obtained for winding up the company.
(1) When a company is registered in pursuance of this Part, sub-sections (2) to (7) shall apply.
(2) All provisions contained in any Act of Parliament or other Indian law, or other instrument constituting or regulating the company, including, in the case of a company registered as a company limited by guarantee, the resolution declaring the amount of the guarantee, shall be deemed to be conditions and regulations of the company, in the same manner and with the same incidents as if so much thereof as would, if the company had been formed under this Act, have been required to be inserted in the memorandum, were contained in a registered memorandum, and the residue thereof were contained in registered articles.
(3) All the provisions of this Act shall apply to the company and the members, contributories and creditors thereof, in the same ma
(1) Subject to the provisions of this section, a company registered in pursuance of this Part may, by special resolution, alter the form of its constitution by substituting a memorandum and articles for a deed of settlement.
(2) The provisions of sections 17 and 19 with respect to an alteration of the objects of a company shall, so far as applicable, apply to any alteration under this section, with the following modifications:—
(a) there shall be substituted for the printed copy of the altered memorandum required to be filed with the Registrar a printed copy of the substituted memorandum and articles; and
(b) on the registration of the alteration being certified by the Registrar, the substituted memorandum and articles shall apply to the company in the same manner as if it were a company regis
The provisions of this Act with respect to staying and restraining suits and other legal proceedings against a company at any time after the presentation of a petition for winding up and before the making of a winding up order, shall, in the case of a company registered in pursuance of this Part, where the application to stay or restrain is by a creditor, extend to suits and other legal proceedings against any contributory of the company.
In this Part, unless the context otherwise requires,—
(a) “active Member” means a member who fulfils the quantum and period of patronage of the Producer Company as may be required by the articles;
(b) “Chief Executive” means an individual appointed as such under sub-section (1) of section 581W;
(c) “limited return” means the maximum dividend as may be specified by the articles;
(d) “Member” means a person or Product institution (whether incorporated or not) admitted as a Member of a Producer Company and who retains the qualifications necessary for continuance as such;
(e) “inter-State co-operative society” means a multi-State co-operative society as defined in clause (p) of section 3 of the
(1) The objects of the Producer Company shall relate to all or any of the following matters, namely:—
(a) production, harvesting, procurement, grading, pooling, handling marketing, selling, export of primary produce of the Members or import of goods or services for their benefit:
Provided that the Producer Company may carry on any of the activities specified in this clause either by itself or through other institution;
(b) processing including preserving, drying, distilling, brewing, vinting, canning and packaging of produce of its Members;
(c) manufacture, sale or supply of machinery, equipment or consumables mainly to its Members;
(d) providing education on the mutual assistance prin
(1) Any ten or more individuals, each of them being a producer or any two or more Producer institutions, or a combination of ten or more individuals and Producer institutions, desirous of forming a Producer Company having its objects specified in section 581B and otherwise complying with the requirements of this Part and the provisions of this Act in respect of registration, may form an incorporated Company as a Producer Company under this Act.
(2) If the Register is satisfied that all the requirements of this Act have been complied with in respect of registration and matters precedent and incidental thereto, he shall, within thirty days of the receipt of the documents required for registration, register the memorandum, the articles and other documents, if any, and issue a certificate of incorporation under this Act.
(3) A Producer Compa
(1) (a) In a case where the membership consists solely of individual members, the voting rights shall be based on a single vote for every Member, irrespective of his shareholding or patronage of the Producer Company.
(b) In a case where the membership consists of Producer institutions only, the voting rights of such Producer institutions shall be determined on the basis of their participation in the business of the Producer Company in the previous year, as may be specified by articles:
Provided that during the first year of registration of a Producer Company, the voting rights shall be determined on the basis of the shareholding by such Producer institutions.
(c) In a case where the membership consists of individuals and Producer institutions, the voting rights shall be computed on the basis o
(1) Subject to provisions made in articles, every Member shall initially receive only such value for the produce or products pooled and supplied as the Board of Producer Company may determine, and the withheld price may be disbursed later in cash or in kind or by allotment of equity shares, in proportion to the produce supplied to the Producer Company during the financial year to such extent and in such manner and subject to such conditions as may be decided by the Board.
(2) Every Member shall, on the share capital contributed, receive only in limited return:
Provided that every such Member may be allotted bonus shares in accordance with the provisions contained in section 581ZJ.
(3) The surplus if any, remaining after making provision for payment of limited return and reserves referred to in
The memorandum of association of every Producer Company shall state—
(a) the name of the company with “Producer Company Limited” as the last words of the name of such Company;
(b) the State in which the registered office of the Producer Company is to situate;
(c) the main objects of the Producer Company shall be one or more of the objects specified in section 581B;
(d) the names and addresses of the persons who have subscribed to the memorandum;
(e) the amount of share capital with which the Producer Company is to be registered and division thereof into shares of a fixed amount;
(f) the names, addresses and occupations of the subscribers being
(1) There shall be presented, for registration to the Registrar of the State to which the registered office of the Producer Company is, stated by the memorandum of association, to be situate—
(a) memorandum of the Producer Company;
(b) its articles duly signed by the subscribers to the memorandum.
(2) The articles shall contain the following mutual assistance principles, namely:—
(a) the membership shall be voluntary and available, to all eligible persons who, can participate or avail of the facilities or services of the Producer Company, and are willing to accept the duties of membership;
(b) each Member shall, save as otherwise provided in this Part, have only a single vote irrespective of t
(1) A Producer Company shall not alter the conditions contained in its memorandum except in the cases, by the mode and to the extent for which express provision is made in this Act.
(2) A Producer Company may, by special resolution, not inconsistent with section 581B, alter its objects specified in its memorandum.
(3) A copy of the amended memorandum, together with a copy of the special resolution duly certified by two directors, shall be filed with the Registrar within thirty days from the date of adoption of any resolution referred to in sub-section (2):
Provided that in the case of transfer of the registered office of a Producer Company from the jurisdiction of one Registrar to another, certified copies of the special resolution certified by two directors shall be filed with both the Regist
(1) Any amendment of the articles shall be proposed by not less than two-third of the elected directors or by not less than one-third of the Members of the Producer Company, and adopted by the Members by a special resolution.
(2) A copy of the amended articles together with the copy of the special resolution, both duly certified by two directors, shall be filed with the Registrar within thirty days from the date of its adoption.]
------------------------
1. Section 581-I ins. by Act 1 of 2003, sec. 2 (w.e.f. 6-2-2003).
(1) Notwithstanding anything contained in sub-section (1) of section 581C, any inter-State co-operative society with objects not confined to one State may make an application to the Registrar for registration as Producer Company under this Part.
(2) Every application under sub-section (1) shall be accompanied by—
(a) a copy of the special resolution, of not less than two-third of total members of inter-State co-operative society, for its incorporation as a Producer Company under this Act;
(b) a statement showing—
(i) names and addresses or the occupation of the directors and Chief Executive, if any, by whatever name called, of such co-operative; and
(ii) list of members of such inter-State co-
Every shareholder of the inter-State co-operative society immediately before the date of registration of Producer Company (hereafter referred to as the transformation date) shall be deemed to be registered on and from that date as a shareholder of the Producer Company to the extent of the face value of the shares held by such shareholder.]
------------------------
1. Section 581K ins. by Act 1 of 2003, sec. 2 (w.e.f. 6-2-2003).
(1) All properties and assets, movable and immovable, of, or belonging to, the inter-State co-operative society as on the transformation date, shall vest in the Producer Company.
(2) All the rights, debts, liabilities, interests, privileges and obligations of the inter-State co-operative society as on the transformation date shall stand transferred to, and be the rights, debts, liabilities, interests, privileges and obligations of, the Producer Company.
(3) Without prejudice to the provisions contained in sub-section (2), all debts, liabilities and obligations incurred, all contracts entered into and all matters and things engaged to be done by, with or for, the society as on the transformation date for or in connection with their purposes, shall be deemed to have been incurred, entered into, or engaged to be done by, with or for, the Pr
With effect from the transformation date, all fiscal and other concessions, licences, benefits, privileges and exemptions granted to the inter-State co-operative society in connection with the affairs and business of the inter-State co-operative society under any law for the time being in force shall be deemed to have been granted to the Producer Company.]
------------------------
1. Section 581M ins. by Act 1 of 2003, sec. 2 (w.e.f. 6-2-2003).
(1) Notwithstanding anything contained in section 581-O, all the directors in the inter-State co-operative society before the incorporation of the Producer Company shall continue in office for a period of one year from the transformation date and in accordance with the provisions of this Act.
(2) Every officer or other employee of the inter-State co-operative society (except a director of the Board, Chairman or Managing Director) serving in its employment immediately before the transformation date shall, in so far as such officer or other employee is employed in connection with the inter-State co-operative society which has vested in the Producer Company by virtue of this Act, become, as from the transformation date, an officer or, as the case may be, other employee of the Producer Company and shall hold his office or service therein by the same tenure, at the same remuneration, up
Every Producer Company shall have at least five and not more than fifteen directors:
Provided that in the case of an inter-State co-operative society incorporated as a Producer Company, such company may have more than fifteen directors for a period of one year from the date of its incorporation as a Producer Company.]
------------------------
1. Section 581-O ins. by Act 1 of 2003, sec. 2 (w.e.f. 6-2-2003).
(1) Save as provided in section 581N, the Members who sign the memorandum and the articles may designate therein the Board of directors (not less than five) who shall govern the affairs of the Producer Company until the directors are elected in accordance with the provisions of this section.
(2) The election of directors shall be conducted within a period of ninety days of the registration of the Producer Company:
Provided that in the case of an inter-State co-operative society which has been registered as a Producer Company under sub-section (4) of section 581J in which at least five directors [including the directors continuing in office under sub-section (1) of section 581N] hold office as such on the date of registration of such company, the provisions of this sub-section shall have effect as if for the words “ninety days”, the words
(1) The office of the director of the Producer Company shall become vacant if—
(a) he is convicted by a Court of any offence involving moral turpitude and sentenced in respect thereof to imprisonment for not less than six months;
(b) the Producer Company, in which he is a director, has made a default in repayment of any advances or loans taken from any company or institution or any other person and such default continues for ninety days;
(c) he has made a default in repayment of any advances or loans taken from the Producer Company in which he is a director;
(d) the Producer Company, in which he is a director—
(i) has not filed the annual accounts and annual return for any continuous three
(1) Subject to the provisions of this Act and articles, the Board of directors of a Producer Company shall exercise all such powers and to do all such acts and things, as that company is authorised so to do.
(2) In particular and without prejudice to the generality of the foregoing powers, such powers may include all or any of the following matters, namely:—
(a) determination of the dividend payable;
(b) determination of the quantum of withheld price and recommend patronage to be approved at general meeting;
(c) admission of new Members;
(d) pursue and formulate the organisational policy, objectives, establish specific long-term and annual objectives, and approve corporate strategies and finan
(1) The Board of directors of a Producer Company shall exercise the following powers on behalf of that company, and it shall do so only by means of resolutions passed at the annual general meeting of its Members, namely:—
(a) approval of budget and adoption of annual accounts of the Producer Company;
(b) approval of patronage bonus;
(c) issue of bonus shares;
(d) declaration of limited return and decision on the distribution of patronage;
(e) specify the conditions and limits of loans that may be given by the Board to any director; and
(f) approval of any transaction of the nature as is to be reserved in the articles for approval by the Membe
(1) When the directors vote for a resolution, or approve by any other means, anything done in contravention of the provisions of this Act or any other law for the time being in force or articles, they shall be jointly and severally liable to make good any loss or damage suffered by the Producer Company.
(2) Without prejudice to the provisions contained in sub-section (1), the Producer Company shall have the right to recover from its director—
(a) where such director has made any profit as a result of the contravention specified in sub-section (1), an amount equal to the profit so made;
(b) where the Producer Company incurred a loss or damage as a result of the contravention specified in sub-section (1), an amount equal to that loss or damage.
(1) The Board may constitute such number of committees as it may deem fit for the purpose of assisting the Board in the efficient discharge of its functions:
Provided that the Board shall not delegate any of its powers or assign the powers of the Chief Executive, to any committee.
(2) A committee constituted under sub-section (1) may, with the approval of the Board, co-opt such number of persons as it deems fit as members of the committee:
Provided that the Chief Executive appointed under section 581W or a director of the Producer Company shall be a member of such committee.
(3) Every such committee shall function under the general superintendence, direction and control of the Board, for such duration, and in such manner as the Board may direct.
(1) A meeting of the Board shall be held not less than once in every three months and at least four such meetings shall be held in every year.
(2) Notice of every meeting of the Board of directors shall be given in writing to every director for the time being in India, and at his usual address in India to every other director.
(3) The Chief Executive shall give notice as aforesaid not less than seven days prior to the date of the meeting of the Board and if he fails to do so, he shall be punishable with fine which may extend to one thousand rupees:
Provided that a meeting of the Board may be called at shorter notice and the reasons thereof shall be recorded in writing by the Board.
(4) The quorum for a meeting of the Board shall be one-third of the
(1) Every Producer Company shall have a full time Chief Executive, by whatever name called, to be appointed by the Board from amongst persons other than Members.
(2) The Chief Executive shall be ex officio director of the Board and such director shall not retire by rotation.
(3) Save as otherwise provided in articles, the qualifications, experience and the terms and conditions of service of the Chief Executive shall be such as may be determined by the Board.
(4) The Chief Executive shall be entrusted with substantial powers of management as the Board may determine.
(5) Without prejudice to the generality of sub-section (4), the Chief Executive may exercise the powers and discharge the functions, namely:—
&nbs
(1) Every Producer Company having an average annual turnover exceeding five crore rupees in each of three consecutive financial years shall have a whole-time secretary.
(2) No individual shall be appointed as whole-time secretary unless he possesses membership of the Institute of Company Secretary of India constituted under the Company Secretaries Act, 1980 (56 of 1980).
(3) If a Producer Company fails to comply with the provisions of 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:
Provided that in any proceedings against a person in respect of an offence under this sub-section, it shall be a defence to prove that all reasonable efforts to com
Unless the articles requires a larger number, one-fourth of the total membership shall constitute the quorum at a general meeting.]
------------------------
1. Section 581Y ins. by Act 1 of 2003, sec. 2 (w.e.f. 6-2-2003).
Save as otherwise provided in sub-sections (1) and (3) of section 581D, every Member shall have one vote and in the case of equality of votes, the Chairman or the person presiding shall have a casting vote except in the case of election of the Chairman.]
------------------------
1. Section 581Z ins. by Act 1 of 2003, sec. 2 (w.e.f. 6-2-2003).
(1) The share capital of a Producer Company shall consist of equity shares only.
(2) The shares held by a Member in a Producer Company, shall as far as may be, be in proportion to the patronage of that company.]
------------------------
1. Section 581ZB ins. by Act 1 of 2003, sec. 2 (w.e.f. 6-2-2003).
(1) Save as otherwise provided in sub-sections (2) to (4), the shares of a Member of a Producer Company shall not be transferable.
(2) A Member of a Producer Company may, after obtaining the previous approval of the Board, transfer the whole or part of his shares along with any special rights, to an active Member at par value.
(3) Every Member shall, within three months of his becoming a Member in the Producer Company, nominate, in the manner specified in articles, a person to whom his shares in the Producer Company shall vest in the event of his death.
(4) The nominee shall, on the death of the Member, become entitled to all the rights in the shares of the Producer Company and the Board of that Company shall transfer the shares of the deceased Member to his nominee:
(1) Every Producer Company shall keep at its registered office proper books of account with respect to—
(a) all sums of money received and expended by the Producer Company and the matters in respect of which the receipts and expenditure take place;
(b) all sales and purchase of goods by the Producer Company;
(c) the instruments of liability executed by or on behalf of the Producer Company;
(d) the assets and liabilities of the Producer Company;
(e) in case of a Producer Company engaged in production, processing and manufacturing, the particulars relating to utilisation of materials or labour or other items of costs.
(2) The balance sheet and prof
Every Producer Company shall have internal audit of its accounts carried out, at such interval and in such manner as may be specified in articles, by a chartered accountant as defined in clause (b) of sub-section (1) of section 2 of the Institute of Chartered Accountants Act, 1949 (38 of 1949).
------------------------
1. Section 581ZF ins. by Act 1 of 2003, sec. 2 (w.e.f. 6-2-2003).
Without prejudice to the provisions contained in section 227, the auditor shall report on the following additional matters relating to the Producer Company, namely:—
(a) the amount of debts due along with particulars of bad debts if any;
(b) the verification of cash balance and securities;
(c) the details of assets and liabilities;
(d) all transactions which appear to be contrary to the provisions of this Part;
(e) the loans given by the Producer Company to the directors;
(f) the donations or subscriptions given by the Producer Company;
(g) any other matter as may be considered necessary by the a
(1) A Producer Company may, by special resolution, make donation or subscription to any institution or individual for the purposes of—
(a) promoting the social and economic welfare of Producer Members or producer or general public; or
(b) promoting the mutual assistance principles:
Provided that the aggregate amount of all such donation and subscription in any financial year shall not exceed three per cent. of the net profit of the Producer Company in the financial year immediately preceding the financial year in which the donation or subscription was made:
Provided further that no Producer Company shall make directly or indirectly to any political party or for any political purpose to any person any contribution or subscription or make availa
(1) Every Producer Company shall maintain a general reserve in every financial year, in addition to any reserve maintained by it as may be specified in articles.
(2) In a case where the Producer Company does not have sufficient funds in any financial year for transfer to maintain the reserves as may be specified in articles, the contribution to the reserve shall be shared amongst the Members in proportion to their patronage in the business of that company in that year.]
------------------------
1. Section 581ZI ins. by Act 1 of 2003, sec. 2 (w.e.f. 6-2-2003).
Any Producer Company may, upon recommendation of the Board and passing of resolution in the general meeting, issue bonus shares by capitalization of amounts from general reserves referred to in section 581ZI in proportion to the shares held by the Members on the date of the issue of such shares.]
------------------------
1. Section 581ZJ ins. by Act 1 of 2003, sec. 2 (w.e.f. 6-2-2003).
The Board may, subject to the provisions made in articles, provide financial assistance to the Members of the Producer Company by way of—
(a) credit facility, to any Member, in connection with the business of the Producer Company, for a period exceeding six months;
(b) loans and advances, against security specified in articles to any Member, repayable within a period exceeding three months but not exceeding seven years from the date of disbursement of such loan or advances:
Provided that any loan or advance to any director or his relative shall be granted only after the approval by the Members in general meeting.]
------------------------
1. Section 581ZK ins. by Act 1 of 2003, sec. 2 (w.e.f.
(1) The general reserves of any Producer Company shall be invested to secure the highest returns available from approved securities, fixed deposits, units, bonds issued by the Government and co-operative or scheduled bank or in such other mode as may be prescribed.
(2) Any Producer Company may, for promotion of its objectives acquire the shares of another Producer Company.
(3) Any Producer Company may subscribe to the share capital of, or enter into any agreement or other arrangement, whether by way of formation of its subsidiary company, joint venture or in any other manner with any body corporate, for the purpose of promoting the objects of the Producer Company by special resolution in this behalf.
(4) Any Producer Company, either by itself or together with its subsidiaries, may invest, by
(1) If any person, other than a Producer Company registered under this Part, carries on business under any name which contains the words “Producer Company Limited”, he shall be punishable with fine which may extend to ten thousand rupees for every day during which such name has been used by him.
(2) If a director or an officer of a Producer Company, who wilfully fails to furnish any information relating to the affairs of the Producer Company required by a Member or a person duly authorised in this behalf, he shall be liable to imprisonment for a term which may extend to six months and with fine equivalent to five per cent. of the turnover of that company during preceding financial year.
(3) If a director or officer of a Producer Company—
(a) makes a default in handling over the custody of b
(1) A Producer Company may, by a resolution passed at its general meeting,—
(a) decide to transfer its assets and liabilities, in whole or in part, to any other Producer Company, which agrees to such transfer by a resolution passed at its general meeting, for any of the objects specified in section 581B;
(b) divide itself into two or more new Producer Companies.
(2) Any two or more Producer Companies may, by a resolution passed at any general or special meetings of its Members, decide to—
(a) amalgamate and form a new Producer Company; or
(b) merge one Producer Company (hereafter referred to as “merging company” with another Producer Company (hereafter referred to as “merged company”).
&nbs
(1) Where any dispute relating to the formation, management or business of a Producer Company arises-
(a) amongst Members, former Members or persons claiming to be Members or nominees of deceased Members; or
(b) between a Member, former Member or a person claiming to be a Member, or nominee of deceased Member and the Producer Company, its Board of directors, office-bearers, or liquidator, past or present; or
(c) between the Producer Company or its Board, and any director, office bearer or any former director, or the nominee, heir or legal representative of any deceased director of the Producer Company,
such dispute shall be settled by conciliation or by arbitration as provided under the Arbitration and Conciliation Act, 1996 as if the parties to the
(1) Where a Producer Company fails to commence business within one year of its registration or ceases to transact business with the Members or if the Registrar is satisfied after making such inquiry as he thinks fit, that the Producer Company is no longer carrying on any of its objects specified in section 581B, he shall make an order striking off the name of the Producer Company, which shall thereupon cease to exist forthwith:
Provided that no such order cancelling the registration as aforesaid shall be passed until a notice to show cause has been given by the Registrar to the Producer Company with a copy to all its directors on the proposed action and reasonable opportunity to represent its case has been given.
(2) Where the Registrar has reasonable cause to believe that a Producer Company is not maintaining any of the mutual assistanc
The provisions of this Part shall have effect notwithstanding anything inconsistent therewith contained in this Act or any other law for the time being in force or any instrument having effect by virtue of any such law; but the provisions of any such Act or law or instrument in so far as the same are not varied by, or are inconsistent with, the provisions of this Part shall apply to the Producer Company.]
------------------------
1. Section 581ZQ ins. by Act 1 of 2003, sec. 2 (w.e.f. 6-2-2003).
(1) Any Producer Company, being an erstwhile inter-State co-operative society, formed and registered under this Part, may make an application—
(a) after passing a resolution in the general meeting by not less than two-third of its Members present and voting; or
(b) on request by its creditors representing three-forth value of its total creditors,
to the High Court for its re-conversion to the inter-State co-operative society.
(2) The High Court shall, on the application made under sub-section (1), direct holding meeting of its Member or such creditors, as the case may be, to be conducted in such manner as it may direct.
(3) If a majority in number representing three-fourths in value of the creditor
(1) The Central Government may, by notification in the Official Gazette, direct that any of the provisions of this Act (other than those contained in this Part) specified in the said notification—
(a) shall not apply to the Producer Companies or any class or category thereof; or
(b) shall apply to the Producer Companies or any class or category thereof with such exception or adaptation as may be specified in the notification.
(2) A copy of every notification proposed to be issued under sub-section (1) shall be laid in draft before each House of Parliament, while it is in section, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive session
(1) The producers, who are active Members may, if so provided in the articles, have special rights and the Producer Company may issue appropriate instruments to them in respect of such special rights.
(2) The instruments of the Producer Company issued under sub-section (1) shall, after obtaining approval of the Board in that behalf, be transferable to any other active Member of that Producer Company.
Explanation.—For the purposes of this section, the expression “special right” means any right relating to supply of additional produce by the active Member or any other right relating to his produce which may be conferred upon him by the Board.]
------------------------
1. Section 581ZC ins. by Act 1 of 2003, sec. 2 (w.e.f. 6-2-2003).
All the limitations, restrictions and provisions of this Act, other than those specified in this Part, applicable to a private company, shall, as far as may be, apply to a Producer Company, as if it is a private limited company under this Act in so far as they are not in conflict with the provisions of this Part.]
------------------------
1. Section 581ZR ins. by Act 1 of 2003, sec. 2 (w.e.f. 6-2-2003).
For the purposes of this Part, the expression “unregistered company”—
(a) shall not include—
(i) a railway company incorporated by any Act of Parliament or other Indian law or any Act of Parliament of the United Kingdom;
(ii) a company registered under this Act; or
(iii) a company registered under any previous companies law and not being a company the registered office whereof was in Burma, Aden or Pakistan immediately before the separation of that country from India 1[***]; and
(b) save as aforesaid, shall include any partnership, association or company consisting of more than seven members 2[at the time when the petition for winding up the partnership, association or company, as the case
(1) Subject to the provisions of this Part, any unregistered company may be wound up under this Act, and all the provisions of this Act with respect to winding up shall apply to an unregistered company, with the exceptions and additions mentioned in 1[sub-sections (3)] to (5).
2[***]
(3) No unregistered company shall be wound up under this Act voluntarily 3[by the Tribunal].
(4) The circumstances in which an unregistered company may be wound up are as follows:—
(a) if the company is dissolved, or has ceased to carry on business, or is carrying on business only for the purpose of winding up its affairs;
(b) if the company is unable to pay its debts;
(c)
Where a body corporate incorporated outside India which has been carrying on business in India, ceases to carry on business in India, it may be wound up as an unregistered company under this Part, notwithstanding that the body corporate has been dissolved or otherwise ceased to exist as such under or by virtue of the laws of the country under which it was incorporated.
(1) In the event of an unregistered company being wound up, every person shall be deemed to be a contributory, who is liable to pay, or contribute to the payment of,—
(a) any debt or liability of the company; or
(b) any sum for the adjustment of the rights of the members among themselves; or
(c) the costs, charges and expenses of winding up the company.
(2) Every contributory shall be liable to contribute to the assets of the company all sums due from him in respect of any liability to pay or contribute as aforesaid.
(3) In the event of the death or insolvency of any contributory, the provisions of this Act with respect to the legal representatives of deceased contributories, or with respect to t
The provisions of this Act with respect to staying and restraining suits and legal proceedings against a company at any time after the presentation of a petition for winding up and before the making of a winding up order, shall, in the case of an unregistered company, where the application to stay or restrain is by a creditor, extend to suits and legal proceedings against any contributory of the company.
Where an order has been made for winding up an unregistered company, no suit or other legal proceeding shall be proceeded with or commenced against any contributory of the company in respect of any debt of the company, except by leave of the 1[Tribunal] and except on such terms as the 1[Tribunal] may impose.
-----------------------------
1. Subs. by Act 11 of 2003, sec. 116, for “Court”.
(1) If an unregistered company has no power to sue and be sued in a common name, or if for any reason it appears expedient the 1[Tribunal] may, by the winding up order or by any subsequent order direct that all or any part of the property, movable or immovable (including actionable claims), belonging to the company or held by trustees on its behalf, shall vest in the Official Liquidator by his official name; and thereupon the property or the part thereof specified in the order shall vest accordingly.
(2) The Official Liquidator may, after giving such indemnity, if any, as the 1[Tribunal] may direct, bring or defend in his official name any suit or legal proceeding relating to that property, or which it is necessary to bring or defend for the purpose of effectually winding up the company and recovering its property.
----------------------
(1) The provisions of this Part with respect to unregistered companies shall be in addition to and not in derogation of, any provisions hereinbefore in this Act contained with respect to the winding up of companies by the 1[Tribunal].
(2) The 1[Tribunal] or Official Liquidator may exercise any powers or do any act in the case of unregistered companies which might be exercised or done by the 1[Tribunal] or Official Liquidator in winding up companies formed and registered under this Act:
Provided that an unregistered company shall not, except in the event of its being wound up, be deemed to be a company under this Act, and then only to the extent provided by this Part.
-----------------------------
1
Nothing in this Part shall affect the operation of any enactment which provides for any partnership, association or company being wound up, or being wound up as a company or as an unregistered company, under the Indian Companies Act, 1913 (7 of 1913), or any Act repealed by that Act:
Provided that references in any such enactment to any provision contained in the Indian Companies Act, 1913 (7 of 1913), or in any Act repealed by that Act shall be read as references to the corresponding provision, if any, contained in this Act.
1[(1)] Sections 592 to 602, both inclusive, shall apply to all foreign companies, that is to say, companies falling under the following two classes, namely:—
(a) companies incorporated outside India which, after the commencement of this Act, establish a place of business within India; and
(b) companies incorporated outside India which have, before the commencement of this Act, established a place of business within India and continue to have an established place of business within India at the commencement of this Act.
2[(2) Notwithstanding anything contained in sub-section (1), where not less than fifty per cent of the paid up share capital (whether equity or preference or partly equity and partly preference) of a company incorporated outside India and having an established place of bus
(1) Foreign companies which, after the commencement of this Act, establish a place of business within India shall, within 1[thirty days] of the establishment of the place of business, deliver to the Registrar for Registration—
(a) a certified copy of the charter, statutes, or memorandum and articles, of the company or other instrument constituting or defining the constitution of the company; and, if the instrument is not in the English language, a certified translation thereof;
(b) the full address of the registered or principal office of the company;
(c) a list of the directors and secretary of the company, containing the particulars mentioned in sub-section (2);
(d) the name and address or the names and addresses of some one or more pe
If any alteration is made or occurs in—
(a) the charter, statutes, or memorandum and articles of a foreign company or other instrument constituting or defining the constitution of a foreign company; or
(b) the registered or principal office of a foreign company; or
(c) the directors or secretary of a foreign company 1[***]; or
(d) the name or address of any of the persons authorised to accept service on behalf of a foreign company; or
(e) the principal place of business of the company in India,
the company shall, within the prescribed time, deliver to the Registrar for registration a return containing the prescribed particulars of the alteration.
(1) Every foreign company shall, in every calendar year,—
(a) make out a balance sheet and profit and loss account in such form, containing such particulars and including or having annexed or attached thereto such documents (including, the particular documents relating to every subsidiary of the foreign company) as under the provisions of this Act it would, if it had been a company within the meaning of this Act, have been required to make out and lay before the company in general meeting; and
(b) deliver three copies of those documents to the Registrar:
Provided that the Central Government may, by notification in the Official Gazette, direct that, in the case of any foreign company or class of foreign company the requirements of clause (a) shall not apply, or shall apply subject to such
Every foreign company shall—
(a) in every prospectus inviting subscriptions in India for its shares or debentures, state the country in which the company is incorporated;
(b) conspicuously exhibit on the outside of every office or place where it carries on business in India, the name of the company and the country in which it is incorporated, in letters easily legible in English characters, and also in the characters of the language or one of the languages in general use in the locality in which the office or place is situate;
(c) cause the name of the company and of the country in which the company is incorporated, to be stated in legible English characters in all business letters, bill-heads and letter paper, and in all notices, 1[***] and other official publications of the company;
Any process, notice, or other document required to be served on a foreign company shall be deemed to be sufficiently served, if addressed to any person whose name has been delivered to the Registrar under the foregoing provisions of this Part and left at, or sent by post to, the address which has been so delivered:
Provided that—
(a) where any such company makes default in delivering to the Registrar the name and address of a person resident in India who is authorised to accept on behalf of the company service of process, notices or other documents; or
(b) if at any time all the persons whose names and addresses have been so delivered are dead or have ceased so to reside, or refuse to accept service on behalf of the company, or for any reason, cannot be served,
(1) Any document which any foreign company is required to deliver to the Registrar shall be delivered to the Registrar having jurisdiction over New Delhi, and references to the Registrar in this Part [except in sub-section (2)] shall be construed accordingly.
(2) Any such document as is referred to in sub-section (1) shall also be delivered to the Registrar of the State in which the principal place of business of the company is situate.
(3) If any foreign company ceases to have a place of business in India, it shall forthwith give notice of the fact to the Registrar, and as from the date on which notice is so given, the obligation of the company to deliver any document to the Registrar shall cease, provided it has no other place of business in India.
If any foreign company fails to comply with any of the foregoing provisions of this Part, the company, and every officer or agent of the company who is in default, shall be punishable with fine which may extend to 1[ten thousand rupees], and in the case of a continuing offence, with an additional fine which may extend to 2[one thousand rupees] for every day during which the default continues.
--------------------------
1. Subs. by Act 53 of 2000, sec. 215, for “one thousand rupees” (w.e.f. 13-12-2000).
2. Subs. by Act 53 of 2000, sec. 215, for “one hundred rupees” (w.e.f. 13-12-2000).
-------------------------
Any failure by a foreign company to comply with any of the foregoing provisions of this Part shall not affect the validity of any contract, dealing or transaction entered into by the company or its liability to be sued in respect thereof; but the company shall not be entitled to bring any suit, claim any set-off, make any counter-claim or institute any legal proceeding in respect of any such contract, dealing or transaction, until it has complied with the provisions of this Part.
(1) The provisions of Part V (sections 124 to 145); shall apply mutatis mutandis to—
(a) charges on properties in India which are created by a foreign company after the 15th day of January, 1937; and
(b) charges on property in India which is acquired by any foreign company after the day aforesaid:
Provided that where a charge is created, or the completion of the acquisition of the property takes place, outside India, sub-section (5) of section 125 and the proviso to sub-section (1) of section 127 shall have effect as if the property, wherever situated, were situated outside India.
(2) The provisions of section 118 shall apply mutatis mutandis to a foreign company.
(3) 1[(a)] The provisions o
There shall be paid to the Registrar for registering any document required by the foregoing provisions of this Part to be registered by him, such fees as may be prescribed.
For the purposes of the foregoing provisions of this Part—
(a) the expression “certified” means certified in the prescribed manner to be a true copy or a correct translation;
(b) the expression “director”, in relation to a company, includes any person in accordance with whose directions or instructions the Board of directors of the company is accustomed to act;
(c) the expression “place of business” includes a share transfer or share registration office;
(d) the expression “prospectus” has the same meaning as when used in relation to a company incorporated under this Act; and
(e) the expression “secretary” includes any person occupying the position of secretary, by whatever name called.
(1) No person shall issue, circulate or distribute in India any prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside India, whether the company has or has not established, or when formed will or will not establish, a place of business in India, unless the prospectus is dated; and
(a) contains particulars with respect to the following matters:—
i) the instrument constituting or defining the constitution of the company;
(ii) the enactments or provisions having the force of enactments, by or under which the incorporation of the company was effected;
(iii) an address in India where the said instrument, enactments, or provision, or copies thereof, and if the same are not in Engli
(1) No person shall issue, circulate or distribute in India any prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside India, whether the company has or has not established, or when formed will or will not establish, a place of business in India—
(a) if, where the prospectus includes a statement purporting to be made by an expert, he has not given, or has before delivery of the prospectus for registration withdrawn, his written consent to the issue of the prospectus with the statement included in the form and context in which it is included, or there does not appear in the prospectus a statement that he has given and has not withdrawn his consent as aforesaid; or
(b) if the prospectus does not have the effect, where an application is made in pursuance thereof, of renderi
1[(1)] No person shall issue, circulate or distribute in India any prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside India, whether the company has or has not established, or when formed will or will not establish, a place of business in India, unless before the issue, circulation or distribution of the prospectus in India, a copy thereof certified by the chairman and two other directors of the company as having been approved by resolution of the managing body has been delivered for registration to the Registrar and the prospectus states on the face of it that a copy has been so delivered, and there is endorsed on or attached to the copy—
(a) any consent to the issue of the prospectus required by section 604;
(b) a copy of any contract required by clause 16 of Sched
Notwithstanding anything contained in any other law for the time being in force, the Central Government may make rules applicable for—
(a) the offer of Indian Depository Receipts;
(b) the requirement of disclosures in prospectus or letter of offer issued in connection with Indian Depository Receipts;
(c) the manner in which the Indian Depository Receipts shall be dealt in a depository mode and by custodian and underwriters;
(d) the manner of sale, transfer or transmission of Indian Depository Receipts,
by a company incorporated, or to be incorporated outside India, whether the company has or has not been established or, will or will not establish any place of business in India.]
Any person who is knowingly responsible—
(a) for the issue, circulation or distribution of a prospectus; or
(b) for the issue of a form of 1[application for shares, debentures; or Indian Depository Receipts],
in contravention of any of the provisions of sections 603, 604 2[, 605 and 605A], shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to 3[fifty thousand rupees], or with both.
------------------------
1. Subs. by Act 53 of 2000, sec. 217, for “application for shares or debentures” (w.e.f. 13-12-2000).
2. Subs. by Act 53 of 2000, se
Section 62 shall extend to every prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside India, whether the company has or has not established, or when formed will or will not establish, a place of business in India, with the substitution for references in section 62 to section 60 of this Act, of references to section 604 thereof.
(1) Where any document by which any shares in, or debentures of, a company incorporated outside India are offered for sale to the public, would, if the company concerned had been a company within the meaning of this Act, have been deemed by virtue of section 64, to be a prospectus issued by the company, that document shall be deemed, for the purposes of this Part, to be a prospectus issued by the company offering such shares or debentures for subscription.
(2) An offer of shares or debentures for subscription or sale to any person whose ordinary business it is to buy or sell shares or debentures, whether as principal or as agent, shall not be deemed to be an offer to the public for the purposes of this Part.
(3) In this Part, the expressions “prospectus”, “shares” and “debentures” have the same meanings as when used in relation to a comp
(1) For the purposes of the registration of companies under this Act, there shall be offices at such places as the Central Government thinks fit.
(2) The Central Government may appoint such Registrars, and such Additional, Joint, Deputy and Assistant Registrars as it thinks necessary for the registration of companies under this Act, and may make regulations with respect to their duties.
(3) The salaries of the persons appointed under this section shall be fixed by the Central Government.
(4) The Central Government may direct a seal or seals to be prepared for the authentication of documents required for, or connected with, the registration of companies.
(5) Whenever any act is by this Act directed to be done to or by the Registrar, it shall, until t
(1) 1[Save as otherwise provided elsewhere in this Act, any person may]—
(a) inspect any documents kept by the Registrar 2[in accordance with the rules made under the Destruction of Records Act, 1917 (5 of 1917)] being documents filed or registered by him in pursuance of this Act, or making a record of any fact required or authorised to be recorded or registered in pursuance of this Act, on payment for each inspection, of 3[such fee as may be prescribed];
(b) require a certificate of the incorporation of any company, or a copy or extract of any other document or any part of any other document to be certified by the Registrar, 4[on payment in advance of 5[such fees as may be prescribed]]:
Provided that the rights conferred by this sub-section shall be exercisable—
&nb
(1) Notwithstanding anything contained in any other law for the time being in force,-
(a) a micro film of a document or the reproduction of the image or images embodied in such micro film (whether enlarged or not); or
(b) a facsimile copy of a document; or
(c) a statement contained in a document and included in a printed material produced by a computer (hereinafter referred to as a “computer printout”), if the conditions mentioned in sub-section (2) are satisfied,
shall be deemed to be also a document for the purposes of this Act and the rules made thereunder and shall be admissible in any proceedings thereunder, without further proof or production of the original, as evidence of any contents of the original or of any fact stated therein of
Notwithstanding anything contained in this Act, and without prejudice to the provisions contained in section 6 of the Information Technology Act, 2000 (21 of 2000), the Central Government may, by notification in the Official Gazette, make rules so as to require from such date as may be specified in the rules, that—
(a) such applications, balance-sheet, prospectus, return, declaration, memorandum of association, articles of association, particulars of charges, or any other particulars or document as may be required to be filed or delivered under this Act or rules made thereunder, shall be filed, through the electronic form and authenticated in such manner as may be specified in the rules;
(b) such document, notice, any communication or intimation, required to be served or delivered under this Act, shall be served or delivered under
(1) The Central Government may, by notification in the Official Gazette, direct that any of the provisions of this Act, so far as it is required for the purpose of electronic record specified under section 610B in the electronic form,—
(a) shall not apply, in relation to the matters specified under clauses (a) to (f) of sub-section (1) of section 610B, as may be specified in the notification; or
(b) shall apply, in relation to the matters specified under clauses (a) to (f) of sub-section (1) of section 610B only with such consequential exceptions, modifications or adoptions as may be specified in the notification:
Provided that no such notification which relates to imposition of fines or other pecuniary penalties or demand or payment of fees or contravention of any of the provisions of t
The Central Government may provide such value added services through the electronic form and levy such fees as may be prescribed.]
----------------------------------
1. Ins. by Act 23 of 2006, sec. 4 (w.e.f. 16-9-2006).
All the provisions of the Information Technology Act, 2000 relating to the electronic records (including the manner and format in which the electronic records shall be filed), in so far as they are not inconsistent with this Act, shall apply, or in relation, to the records in electronic form under section 610B.]
----------------------------------
1. Ins. by Act 23 of 2006, sec. 4 (w.e.f. 16-9-2006).
1[(1)] In respect of the several matters mentioned in Schedule X, there shall, subject to the limitations imposed by that Schedule, be paid to the Registrar the several fees therein specified:
Provided that no fees shall be charged in respect of the registration in pursuance of Part IX of a company, if it is not registered as a limited company, or if, before its registration as a limited company, the liability of the shareholders was limited by some other Act of Parliament or any other Indian law or by an Act of Parliament of the United Kingdom, Royal Charter or Letters Patent in force in India:
2[Provided further that in the case of resolutions to which section 192 applies, not more than one fee shall be required for the filing of more resolutions than one passed in the same meeting if such resolutions are filed with the Registrar at th
All fees, charges, and other sums paid to any Registrar, any Additional, Joint, Deputy, or Assistant Registrar, or any other officer of the Central Government in pursuance of this Act shall be paid into the public account of India in the Reserve Bank of India.
(1) The Central Government may, by order notified in the Official Gazette, reduce the amount of any fee, charge or other sum specified in any provision contained in this Act, as payable in respect of any matter, either to the Central Government or to any Registrar, any Additional, Joint, Deputy, or Assistant Registrar or any other officer of the Central Government, and thereupon such provision shall, during the period for which the order is in force, have effect as if the reduced fee had been substituted for the fee specified in such provision.
(2) Any order notified under sub-section (1) may, by a like order, be cancelled or varied at any time by the Central Government.
(3) Nothing in this section shall be deemed to affect the power of the Central Government under section 641 to alter any of the fees specified in Schedule X.
(1) If a company, having made default in complying with any provision of this Act which requires it to file or register with, or deliver or sent to, the Registrar any return, account or other document, or to give notice to him of any matter, fails to make good the default within fourteen days after the service of a notice on the company requiring it to do so, the 1[Tribunal] may, on an application made to it by any member or creditor of the company or by the Registrar, make an order directing the company and any officer thereof to make good the default within such time as may be specified in the order.
(2) Any such order may provide that all costs of and incidental to the application shall be borne by the company or by any officers of the company responsible for the default.
(3) Nothing in this section shall be taken to prejudice the ope
(1) Any Court trying an offence for a default in compliance with any provision of this Act which requires a company or its officers to file or register with, or deliver or send to the Registrar, any return, account or other document, may at the time of sentencing, acquitting or discharging the accused, direct by order, if it thinks fit to do so, any officer or other employee of the company to file or register with, deliver or send to, the Registrar on payment of the fee including the additional fee required to be paid under section 611, such return, account or other document within such time as may be specified in the order.
(2) Any officer or other employee of the company who fails to comply with an order of the Court under sub-section (1) shall be punishable with imprisonment for a term which may extend to six months, or with fine, or with both.]
(1) The Central Government may, by order, require companies generally, or any class of companies, or any company, to furnish such information or statistics with regard to their or its constitution or working, and within such time, as may be specified in the order.
(2) (a) Every order under sub-section (1) addressed to companies generally or to any class of companies, shall be published in the Official Gazette, and in such other manner, if any, as the Central Government may think fit.
(b) The date of publication of the order in the Official Gazette shall be deemed to be the date on which the demand for information or statistics is made on such companies or class of companies, as the case may be.
(3) Every order under sub-section (1) addressed to an individual company shall be served on it in th
The provisions of this Act shall apply—
(a) to insurance companies, except insofar as the said provisions are inconsistent with the provisions of the Insurance Act, 1938 (4 of 1938);
(b) to banking companies, except insofar as the said provisions are inconsistent with the provisions of the Banking Companies Act, 1949 (10 of 1949);
(c) to companies engaged in the generation or supply of electricity, except insofar as the said provisions are inconsistent with the provisions of 1[the Indian Electricity Act, 1910 (9 of 1910), or] the Electricity Supply Act, 1948 (54 of 1948);
(d) to any other company governed by any special Act for the time being in force, except insofar as the said provisions are inconsistent with the provisions of such spe
For the purposes of 1[this Act] Government company means any company in which not less than fifty-one per cent of the 2[paid up share capital] is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments 3[and includes a company which is a subsidiary of a Government company as thus defined].
----------------------------------
1. Subs. by Act 65 of 1960, sec. 198, for “sections 618, 619 and 620” (w.e.f. 28-12-1960).
2. Subs. by Act 65 of 1960, sec. 198, for “share capital” (w.e.f. 28-12-1960).
3. Added by Act 65 of 1960, sec. 198 (w.e.f. 28-12-1960).
----------------------------------
[Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 219 (w.e.f. 13-12-2000).]
(1) In the case of a Government company, the following provisions shall apply, notwithstanding anything contained in sections 224 to 233.
(2) The auditor of a Government company shall be appointed or re-appointed by the Comptroller and Auditor-General of India :
Provided that the limits specified in sub-sections (1B) and (1C) of section 224 shall apply in relation to the appointment or re-appointment of an auditor under this sub-section.
(3) The Comptroller and Auditor-General of India shall have power
(a) to direct the manner in which the company's accounts shall be audited by the auditor appointed in pursuance of sub-section (2) and to give such auditor instructions in regard to any matter relating to the performance of his functions as such ;
The provisions of section 619 shall apply to a company in which not less than fifty-one per cent of the paid-up share capital is held by one or more of the following or any combination thereof, as if it were a Government company, namely:—
(a) the Central Government and one or more Government companies;
(b) any State Government or Governments and one or more Government companies;
(c) the Central Government, one or more State Governments and one or more Government companies;
(d) the Central Government and one or more corporations owned or controlled by the Central Government;
(e) the Central Government, one or more State Governments and one or more corporations owned or controlled by the Cent
(1) The Central Government may, by notification in the Official Gazette, direct that any of the provisions of this Act (other than sections 618, 619 and 1[619A]) specified in the notification:—
(a) shall not apply to any Government company; or
(b) shall apply to any Government company, only with such exceptions, modifications and adaptations, as may be specified in the notification.
2[(2) A copy of every notification proposed to be issued under sub-section (1), shall be laid in draft before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in disappr
(1) In this section, “Nidhi” or “Mutual Benefit Society” means a company which the Central Government may, by notification in the Official Gazette, declare to be a Nidhi or Mutual Benefit Society, as the case may be.
(2) The Central Government may, by notification in the Official Gazette, direct that any of the provisions of this Act specified in the notification—
(a) shall not apply to any Nidhi or Mutual Benefit Society, or
(b) shall apply to any Nidhi or Mutual Benefit Society with such exceptions, modifications and adaptations as may be specified in the notification.
(3) A copy of every notification issued under sub-section (1) shall be laid as soon as may be after it is issued, before each House of Parliament.
The Central Government may, by notification in the Official Gazette, direct that for such period or periods with effect from the 26th January, 1963, or any subsequent date, any of the provisions of this Act specified in the notification shall not apply, or shall apply only with such exceptions and modifications or adaptations as may be specified in the notification, to—
(a) any existing company in the Union Territory of Goa, Daman and Diu;
(b) any company registered in the said Union territory under this Act on or after the 26th January, 1963.
The Central Government may by notification in the Official Gazette, direct that with effect from the commencement of the Central Laws (Extension to Jammu and Kashmir) Act, 1968 or any subsequent date, any of the provisions of this Act specified in the notification shall not apply, or shall apply only with such exceptions and modifications or adaptations as may be specified in the notification, to—
(a) any existing company in the State of Jammu and Kashmir;
(b) any company registered in that State under this Act after the commencement of the Central Laws (Extension to Jammu and Kashmir) Act, 1968.
(1) No Court shall take cognizance of any offence against this Act 1[***] which is alleged to have been committed by any company or any officer thereof, except on the complaint in writing of the Registrar, or of a shareholder of the company, or of a person authorised by the Central Government in that behalf:
Provided that nothing in this sub-section shall apply to a prosecution by a company of any of its officers:
2[Provided further that the Court may take cognizance of offence relating to issue and transfer of securities and non-payment of dividend on a complaint in writing by a person authorised by the Securities Exchange Board of India.]
3[(1A) Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (5 of 1898)4, where the complainant under sub-section (1) is the Registra
Section 621 of the Companies Act, 1956, delineates the procedural and substantive limitations on initiating criminal proceedings against companies and their officers for offences under the Act. It emphasizes the necessity of a complaint being lodged by authorized persons and restricts the cognizance of offences to specific entities, thereby safeguarding companies and officers from unwarranted prosecutions.
In conclusion, Section 621 of the Companies Act, 1956, acts as a safeguard for companies and officers by limiting the initiation of criminal proceedings to specific authorized entities, ensuring procedural integrity, and discouraging frivolous or malicious prosecutions. Its provisions on non-compoundability, limitations, and the role of the Department and Registrar are designed to uphold the rule of law while balancing the need for accountability.
No Court inferior to that of a Presidency Magistrate or a Magistrate of the first class shall try any offence against this Act.
If any offence against this Act which is punishable with fine only is committed by any person within a Presidency town, such person may be tried summarily and punished by any Presidency Magistrate of that Presidency town.
Notwithstanding anything in Code of Criminal Procedure, 1898 (5 of 1898)1, every offence against this Act shall be deemed to be non-cognizable within the meaning of the said Code.
---------------------------
1. See now the Code of Criminal Procedure, 1973 (2 of 1974).
---------------------------
Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (5 of 1898) 2 the Central Government may appoint generally or in any case, or for any specified class of cases in any local area, one or more persons, as company prosecutors for the conduct of prosecutions arising out of this Act; and the persons so appointed as company prosecutors shall have all the powers and privileges conferred by that Code 3 on public prosecutors appointed by a State Government under section 492 of that Code.]
----------
1. Ins. by Act 65 of 1960, sec. 203 (w.e.f. 28-12-1960).
2. See now the Code of Criminal Procedure, 1973 (2 of 1974).
3.See now the Code of Criminal Procedure, 1973 (2 of 1974), section 24.
Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (5 of 1898)2 the Central Government may, in any case arising out of this Act, direct any company prosecutor or authorise any other person either by name or by virtue of his office, to present an appeal from an order of acquittal passed by any Court other than a High Court and an appeal presented by such prosecutor or other person shall be deemed to have been validly presented to the appellate Court.]
---------------------------
1. Ins. by Act 65 of 1960, sec. 203 (w.e.f. 28-12-1960).
2. See now the Code of Criminal Procedure, 1973 (2 of 1974).
---------------------------
(1) In respect of any case instituted upon the complaint of a shareholder against the company or any officer thereof in pursuance of section 621, the provisions of section 250 of the Code of Criminal Procedure, 1898 (5 of 1898), shall not apply and the following provisions shall apply instead.
(2) If the Magistrate by whom any such case is heard discharges or acquits all or any of the accused, and is of opinion that the accusation against them or any of them was false and either frivolous or vexatious, the Magistrate may, by his order of discharge or acquittal, if the shareholder upon whose complaint the accusation was made is present, call upon him forthwith to show cause why he should not pay compensation to such accused, or to each or any of such accused when there is more than one, or if such shareholder is not present, direct the issue of a summons to him to appear and show ca
The 1[Court or Tribunal] imposing any fine under this Act may direct that the whole or any part thereof shall be applied in or towards payment of the costs of the proceedings, or in or towards the rewarding of the person on whose information or at whose instance the fine is recovered.
------------------------------
1. Subs. by Act 11 of 2003, sec. 121, for “Court”.
------------------------------
(1) If, on an application made to a Judge of a High Court in chambers 1[or Tribunal, as the case may be,] by the Public Prosecutor of the State or by the Central Government, 2[or by a company prosecutor appointed under section 624A], it is shown that there is reasonable cause to believe that any person has, while, he was an officer of a company, committed an offence in connection with the management of the company’s affairs, and that evidence of the commission of the offence is to be found in any books or papers of or under the control of the company, an order may be made—
(i) authorising any person named therein to inspect the said books or papers or any of them for the purpose of investigating, and obtaining evidence of the commission of, the offence; or
(ii) requiring the 3[***] manager of the company or such other officer there
If in any return, report, certificate, balance sheet, prospectus, statement or other document required by or for the purposes of any of the provisions of this Act, any person makes a statement—
(a) which is false in any material particular, knowing it to be false; or
(b) which omits any material fact knowing it to be material,
he shall, save as otherwise expressly provided in this Act, be punishable with imprisonment for a term which may extend to two years, and shall also be liable to fine.
If any person intentionally gives false evidence—
(a) upon any examination upon oath or solemn affirmation, authorised under this Act; or
(b) in any affidavit, deposition or solemn affirmation, in or about the winding up of any company under this Act, or otherwise in or about any matter arising under this Act,
he shall be punishable with imprisonment for a term which may extend to seven years, and shall also be liable to fine.
If a Company or any other person contravenes any provision of this Act for which no punishment is provided elsewhere in this Act or any condition, limitation or restriction subject to which any approval sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, the company and every officer of the company who is in default or such other person shall be punishable with fine which may extend to 2[five thousand rupees], and where the contravention is a continuing one, with a further fine which may extend to 3[five hundred rupees] for every day after the first during which the contravention continues.]
-------------------------------
1. Ins. by Act 65 of 1960, sec. 205 (w.e.f. 28-12-1960).
(1) If any officer or employee of a company.—
(a) wrongfully obtains possession of any property of a company; or
(b) having any such property in his possession, wrongfully withholds it or knowingly applies it to purposes other than those expressed or directed in the articles and authorised by this Act,
he shall, on the complaint of the company or any creditor or contributory thereof, be punishable with fine which may extend to 1[ten thousand rupees].
(2) The Court trying the offence may also order such officer or employee to deliver up or refund, within a time to be fixed by the Court, any such property wrongfully obtained or wrongfully withheld or knowingly misapplied, or in default, to suffer imprisonment for a term which may extend to two y
Section 630 of the Companies Act, 1956, addresses the penal consequences for officers or employees of a company who wrongfully withhold or obtain possession of the company's property. It aims to provide a speedy remedy for the recovery of property and penalize wrongful acts that obstruct the company's rights. The section has been interpreted broadly to include past officers, legal heirs, and representatives in possession of company property, emphasizing the importance of protecting corporate assets.
Section 630 stipulates that:- Any officer or employee of a company who wrongfully obtains or withholds possession of the company's property commits an offence.- The section applies to both current and past officers or employees.- The offence is quasi-criminal in nature, allowing for summary proceedings.- The section provides for penalties, including fines and imprisonment, and mandates the return of the property.- It also covers the wrongful retention by legal heirs or representatives after the death of an employee or officer.
In conclusion, Section 630 of the Companies Act, 1956, provides a robust legal framework for the speedy recovery and penalization of wrongful withholding of company property. Its broad interpretation ensures that all persons in wrongful possession, including past officers, employees, and legal heirs, are liable, thereby safeguarding corporate assets effectively. The section’s quasi-criminal character and the courts' jurisdiction across territories reinforce its importance as a swift remedy against wrongful acts obstructing the company's property rights.
If any person or persons trade or carry on business under any name or title of which the word “Limited” or the words “Private Limited”, or any contraction or limitation thereof, is or are the last word or words, that person or each of those persons shall, unless, duly incorporated with limited liability, or unless duly incorporated as a private company with limited liability, as the case may be, be punishable with fine which may extend to 1[five hundred rupees] for every day upon which that name or title has been used.
-------------------------------
1. Subs. by Act 53 of 2000, sec. 226, for “fifty rupees” (w.e.f. 13-12-2000).
-------------------------------
Where a limited company is plaintiff or petitioner in any suit or other legal proceeding, any 1[Court or Tribunal] having jurisdiction in the matter may, if there is reason to believe that the company will be unable to pay the costs of the defendant if he is successful in his defence require sufficient security to be given for those costs, and may stay all proceedings until the security is given.
------------------------------
1. Subs. by Act 11 of 2003, sec. 123, for “Court”.
------------------------------
(1) If in any proceeding for negligence, default, breach of duty, misfeasance or breach of trust against an officer of a company, it appears to the Court hearing the case that he is or may be liable in respect of the negligence, default, breach of duty, misfeasance or breach of trust, but that he has acted honestly and reasonably, and that having regard to all the circumstances of the case, including those connected with his appointment, he ought fairly to be excused, the Court may relieve him, either wholly or partly, from his liability on such terms as it may think fit:
1[Provided that in a criminal proceeding under this sub-section, the Court shall have no power to grant relief from any civil liability which may attach to an officer in respect of such negligence, default, breach of duty, misfeasance or breach of trust.]
2[(2) Where an
Any order made by a Court under this Act may be enforced in the same manner as a decree made by the Court in a suit pending therein.
Any order made by the Company Law Board 2[***] may be enforced by that Board in the same manner as if it were a decree made by a Court in a suit pending therein, and it shall be lawful for that Board to send, in the case of its inability to execute such order, to the Court within the local limits of whose jurisdiction,—
(a) in the case of an order against a company, the registered office of the company is situated, or
(b) in the case of an order against any other person, the person concerned voluntarily resides, or carries on business or personally works for gain.]
3[Provided that the provisions of this section shall not apply on and after the commencement of the Companies (Second Amendment) Act, 2002.]
(1) Where any order made by one Court is required to be enforced by another Court, a certified copy of the order shall be produced to the proper officer of the Court required to enforce the order.
(2) The production of such certified copy shall be sufficient evidence of the order.
(3) Upon the production of such certified copy, the Court shall take the requisite steps for enforcing the order, in the same manner as if it had been made by itself.
1[(4) Where any order made by the 2[Company Law Board or Tribunal] 3[***] is required to be enforced by a Court, a certified copy of the order shall be produced to the proper officer of the Court required to enforce the order and the provisions of sub-sections (2) and (3) shall, as far as may be, apply to every such order in the same manner and to the s
No suit, prosecution or other legal proceeding shall lie against the Government or any officer of Government or any other person in respect of anything which is in good faith done or intended to be done in pursuance of this Act or any rules or orders made thereunder, or in respect of the publication by or under the authority of the Government or such officer of any report, paper or proceedings.
-------------------------------
1. Subs. by Act 31 of 1965, sec. 58, for section 635A (w.e.f. 15-10-1965).
-------------------------------
Notwith-standing anything contained in any other law for the time being in force, the Registrar, any officer of Government or any other person shall not be compelled to disclose to any Court, tribunal or other authority whence he got any information which—
(a) has led the Central Government to direct a special audit under section 233A or to order an investigation under section 235, 237 1[or 247]; or
(b) is or has been material or relevant in connection with such special audit or investigation.]
------------------------------
1. Subs. by Act 53 of 2000, sec. 227, for “, 247, 248 or 249” (w.e.f. 13-12-2000).
------------------------------
(a) during the course of any investigation of the affairs and other matters of or relating to a company, body or person under section 235, section 237 or section 239 or of the membership and other matters of or relating to a company, or the ownership of shares in or debentures of a company or body corporate, or the affairs and other matters of or relating to a company, body or person, under section 247 2[***]; or
(b) during the pendency of any proceeding against any person concerned in the conduct and management of the affairs of a company under Chapter IVA of Part VI,
such company, body or person proposes—
(i) to discharge, or
(ii) to punish, whether by dismissal, removal, reduction in rank or otherwise,
&nbs
(1) A company which is entitled to any specified fee, charge, or other sum by virtue of any provision contained in this Act or in its articles, may reduce the amount thereof to such extent as it thinks fit; and thereupon such provision shall, so long as the reduction is in force, have effect as if the reduced amount had been substituted for the fee, charge or sum specified in such provision.
(2) Any reduction made under sub-section (1) may, at any time, be cancelled or varied by the company.
1[(1) The Central Government may, by notification in the Official Gazette, and subject to such conditions, restrictions and limitations as may be specified therein, delegate any of its powers or functions under this Act (other than the power to appoint a person as public trustee under section 153A and the power to make rules), to such authority or officer as may be specified in the notification.]
2[(2) The powers and functions which cannot be delegated under 3[***] sub-section (1) are those conferred by or mentioned in the following provisions of this Act, namely, sections 10, 81, 89(4), 211(3) and (4), 212, 213, 235, 237, 239, 241, 242, 243, 244, 245, 247,4[***] 250, 259, 268, 269, 274(2), 295, 300, 310, 311, 5[***], 349, 6[***], 372, 396, 399(4), and (5), 401, 408, 7[***] 410, 411(b), 448, 609, 613, 620, 638, 641, and 642.]
8[***]
&
Notwithstanding anything contained in section 198, section 309 or section 637A, the Central Government, may, while according its approval under section 269, to any appointment or to any remuneration under section 309, section 310, section 311 or section 387, fix the remuneration of the person so appointed or the remuneration, as the case may be, within the limits specified in this Act, at such amount or percentage of profits of the company, as it may deem fit and while fixing the remuneration, the Central Government shall have regard to—
(a) the financial position of the company;
(b) the remuneration or commission drawn by the individual concerned in any other capacity, including his capacity as a sole selling agent;
(c) the remuneration or commission drawn by him from any other compa
Notwithstanding anything contained in this Act,—
(a) where any application required to be made to the Central Government under any provision of this Act in respect of any matter is not made within the time specified therein that Government may, for reasons to be recorded in writing, condone the delay;
(b) where any document required to be filed with the Registrar under any provision of this Act is not filed within the time specified therein, the Central Government may, for reasons to be recorded in writing, condone the delay.]
-------------------------------
1. Ins. by Act 31 of 1965, sec. 59 (w.e.f. 15-10-1965).
-------------------------------.<
The Central Government shall cause a general annual report on the working and administration of this Act to be prepared and laid before both Houses of Parliament, within one year of the close of the year to which the report relates.
1[***]
-------------------------------
1. The heading “Annual Reports on Government Companies” omitted by Act 65 of 1960, sec. 208 (w.e.f. 28-12-1960).
-------------------------------
[Rep. by the Companies (Amendment) Act, 1960 (65 of 1960), sec. 208 (w.e.f. 28-12-1960).]
Any firm which stood registered at the commencement of this Act, as a member of any association or company licensed under section 26 of the Indian Companies Act, 1913 (7 of 1913), shall be deemed to have been validly so registered with effect on and from the date of its registration.
Except as expressly provided in this behalf elsewhere in this Act, where by any provision of this Act, any order of the Court or Tribunal is required to be filed with the Registrar, or a company or any other person within a period specified therein, then, in computing that period, the time taken in drawing up the order and in obtaining a copy thereof shall be excluded.]
----------------------------
1. Subs. by Act 11 of 2003, sec. 129, for section 640A.
----------------------------
(1) Every application made to the Central Government under sections 259, 268, 269, 310 2[or 352] shall be in such form as may be prescribed.
(2) (a) Before any application is made by a company to the Central Government under any of the sections aforesaid, there shall be issued by or on behalf of the company a general notice to the members thereof, indicating the nature of the application proposed to be made.
(b) Such notice shall be published at least once in a newspaper in the principal language of the district in which the registered office of the company is situate and circulating in that district, and at least once in English in an English newspaper circulating in that district.
(c) Copies of the notices, together with a certificate by the company as to the due publication thereof, shall b
(1) Subject to the provisions of this section, the Central Government may, by notification in the Official Gazette, alter any of the regulations, rules, tables, forms and other provisions contained in any of the Schedules to this Act, except Schedules XI and XII.
(2) Any alteration notified under sub-section (1) shall have effect as if enacted in this Act and shall come into force on the date of the notification unless the notification otherwise directs:
Provided that no such alteration in Table A of Schedule I shall apply to any company registered before the date of such alteration.
1[(3) Every alteration made by the Central Government under sub-section (1) shall be laid as soon as may be after it is made before each House of Parliament while it is in session for a total period of thirty days
(1) In addition to the powers conferred by section 641, the Central Government may, by notification in the Official Gazette, make rules—
(a) for all or any of the matters which by this Act are to be, or may be prescribed by the Central Government; and
(b) generally to carry out the purposes of this Act.
1[(2) Any rule made under sub-section (1) may provide that a contravention thereof shall be punishable with fine which may extend to 2[five thousand rupees] and where the contravention is a continuing one, with a further fine which may extend to 3[five hundred rupees] for every day after the first during which such contravention continues.
(3) Every rule made by the Central Government under sub-section (1) shall be laid as soon as may be after
(1) The Central Government shall, make rules consistent with the Code of Civil Procedure, 1908 (5 of 1908), providing for all matters relating to the winding up of companies, which by this Act, are to be prescribed, and may make rules providing for all such matters, as may be prescribed.
(2) In particular, and without prejudice to the generality of the forgoing power, such rule may provide for all or any of the following matters, namely:—
(i) as to the mode of proceedings to be held for winding up of a company by the Tribunal;
(ii) for the voluntary winding up of companies, whether by members or by creditors;
(iii) for the holding of meetings of creditors and members in connection with proceedings under section 391;
&nb
The enactments mentioned in Schedule XII are hereby repealed.
Nothing in this Act shall affect any order, rule, regulation, appointment, conveyance, mortgage, deed, document or agreement made, fee directed, resolution passed, direction given, proceeding taken, instrument executed or issued, or thing done, under or in pursuance of any previous companies law; but any such order, rule, regulation, appointment, conveyance, mortgage, deed, document, agreement, fee, resolution, direction, proceeding, instrument or thing shall, if in force at the commencement of this Act, continue to be in force, and so far as it could have been made, directed, passed, given, taken, executed, issued or done under or in pursuance of this Act, shall have effect as if made, directed, passed, given, taken executed, issued or done under or in pursuance of this Act.
Nothing in this Act shall affect the operation of section 138 of the Indian Companies Act, 1913 (7 of 1913), as respects inspectors, or as respects the continuation of an inspection begun by inspectors, appointed before the commencement of this Act; and the provisions of this Act shall apply to or in relation to a report of inspectors appointed under the said section 138 as they apply to or in relation to a report of inspectors appointed under section 235 or 237 of this Act.
Where the winding up of a company has commenced before the commencement of this Act,—
(i) sub-section (7) of section 555 shall apply in respect of any moneys paid into the Companies Liquidation Account whether before or after such commencement; and
(ii) the other provisions with respect to winding up contained in this Act shall not apply, but the company shall be wound up in the same manner and with the same incidents as if this Act had not been passed:
1[Provided that where the proceedings in any such winding up are pending at the commencement of the Companies (Amendment) Act, 1960,—
(a) sections 463, 502, 515 and 524 shall, as far as may be, also apply in relation thereto;
(b) the liquidator
All proceedings (including proceedings relating to arbitration, compromises, arrangements and reconstruction and winding up of a company) pending before the commencement of the Companies (Second Amendment) Act, 2002 before any District Court or High Court, under this Act, or the Insurance Act, 1938 (4 of 1938) or any other law for the time being in force other than under the Banking Regulation Act, 1949 (10 of 1949), shall be transferred to the Tribunal from the date to be notified by the Central Government, in the Official Gazette, and the Tribunal may proceed with the matter either de novo or from the stage it was so transferred:
Provided that where the winding up of a company has commenced, subject to the supervision of the District Court or a High Court, before the commencement of the Companies (Second Amendment) Act, 2002, such winding up shall continue to be under the supervi
Nothing in this Act shall affect any prosecution instituted or ordered by the Court to be instituted under section 237 of the Indian Companies Act, 1913 (7 of 1913), and the Court shall have the same power of directing how any costs, charges, and expenses properly incurred in any such prosecution are to be defrayed as it would have had, if this Act had not been passed.
Section 648 of the Companies Act, 1956, addresses the legal status and preservation of prosecutions initiated under earlier company laws, specifically those instituted by liquidators or courts under the Companies Act, 1913. It provides clarity on whether such prosecutions are affected by the enactment of the 1956 Act, thereby ensuring continuity and legal certainty in proceedings related to company offences.
Section 648 states that "Nothing in this Act shall affect any prosecution instituted or ordered by a court or liquidator under section 237 of the Companies Act, 1913." It explicitly preserves prosecutions that were initiated under the previous law, even after the commencement of the 1956 Act, provided they were instituted or ordered under the provisions of the earlier law.
In conclusion, Section 648 of the Companies Act, 1956, plays a crucial role in safeguarding prosecutions initiated under the Companies Act, 1913, ensuring a smooth legal transition and maintaining the integrity of past proceedings.
Any document referring to any former enactment relating to companies shall be construed as referring to the corresponding enactment in this Act.
[Rep. by the Companies (Amendment) Act, 1960 (65 of 1960), sec. 214 (w.e.f. 28-12-1960).]
Any reference to an extraordinary resolution in the articles of a company, or in any resolution passed in general meeting by the company, or in any other instrument, or in any law in force immediately before the commencement of this Act, shall, with effect on and from such commencement, be construed as a reference to a special resolution.
Section 651 of the Companies Act, 1956, pertains to the construction of references to extraordinary resolutions within the articles of a company. It clarifies how such references should be interpreted, especially in legal and procedural contexts, ensuring consistency in understanding and application.
Section 651 states that any reference to an extraordinary resolution in the articles of a company, or in any other document, shall be construed as a reference to a resolution passed in accordance with the provisions of the Act or the articles, as the case may be. It provides a standardized interpretation to prevent ambiguity regarding the nature and validity of such resolutions.
Note: The analysis is based on the available sources and the typical legal understanding of Section 651 of the Companies Act, 1956.
Unless the context otherwise requires,—
(a) any reference to the winding up of a company by a Court or High Court or winding up of a company subject to supervision of a Court or High Court in any other law (except the Banking Regulation Act, 1949 [10 of 1949]) shall, in so far as it relates to winding up of a company, be construed as winding up of a company by the Tribunal in accordance with the provisions of this Act;
(b) any reference to the Company Law Board in any other law, so far as it relates to the Company Law Board, shall be construed as the Tribunal under this Act.]
-----------------------------
1. Ins. by Act 11 of 2003, sec. 134.
-----------------------------
Any person appointed to any office under or by virtue of any previous companies law shall be deemed to have been appointed to that office under or by virtue of this Act.
The offices existing at the commencement of this Act for the registration of companies shall be continued as if they had been established under this Act.
Any register kept under the provisions of any previous companies law shall be deemed to be part of the register to be kept under the corresponding provisions of this Act.
All funds constituted and accounts kept under this Act shall be deemed to be in continuation of the corresponding funds constituted and accounts kept under previous companies laws.
Nothing in this Act shall affect the incorporation of any company registered under any enactment hereby repealed.
Nothing in this Act shall affect—
(a) Table B in the Schedule annexed to Act No. XIX of 1857, or any part thereof, so far as the same applies to any company existing at the commencement of this Act;
(b) Table A in the First Schedule annexed to the Indian Companies Act 1882 (6 of 1882), or any part thereof, so far as the same applies to any company existing at the commencement of this Act;
(c) Table A in the First Schedule to the Indian Companies Act 1913 (7 of 1913), either as originally contained in that Schedule or as altered in pursuance of section 151 of that Act, so far as the same applies to any company existing at the commencement of this Act.
The mention of particular matters in sections 645 to 657 or in any other provision of this Act shall not prejudice the general application of section 6 of the General Clauses Act, 1897 (10 of 1897), with respect to the effect of repeals.
1[***]
------------------
1. Schedule VII and VIII containing provisions relating to managing agent, secretaries and treasurers have ceased to have effect by Act 17 of 1969, sec. 6 (w.e.f. 3-4-1970).
v.htm
[See section 6 (c)]
1. Father.
2. Mother (including step-mother).
3. Son (including step-son).
4. Son’s wife.
5. Daughter (including step-daughter).
6. Father’s father.
7. Father’s mother.
8. Mother’s mother.
9. Mother’s father.
10. Son’s son.
11. Son’s son’s wife
12. Son’s
I. General information.—
Name and address of registered office of the company.
(i) Consent of the Central Government for the present issue and declaration of the Central Government about non-responsibility for financial soundness or correctness of statements.
(ii) Letter of Intent/industrial licence and declaration of the Central Government about non-responsibility for financial soundness or correctness of statements.
Names of regional stock exchange and other stock exchanges where application made for listing of present issue.
Provisions of sub-section (1) of section 68A of the Companies Act, relating to punishment for fictitious applications.
Statement/de
SCHEDULE XI
(See section 406)
539. Penalty for falsification of books.—If with intent to defraud or deceive any person, any officer or member of a company in respect of which an application has been made under section 397 or 398—
(a) destroys, mutilates, alters, falsifies or secretes any books, papers or securities, or is privy to the destruction, mutilation, alteration, falsification, or secreting of any books, papers or securities; or
(b) makes, or is privy to the making of, any false or fraudulent entry in any register, book of account or document belonging to the company,
he shall be punishable with imprisonment for a term which m
w.htm
Elevate your legal practice with advanced AI-driven research and drafting solutions. Experience unmatched efficiency, precision, and security, tailored exclusively for legal professionals.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
AI Assistant
