ImPORTANT Compliance under Companies Act, 2013 ) …By CS Jitesh Gupta (FCS, MIMA, PGD-TL, MBA)

Section 12 (Printing of Name, CIN etc.) Section 12 (Print/affix of Regd. Office Address) Every Company shall paint or affix the name and address of the registered office and keep the same printed/affixed, outside every office or place in which its business is carried on. Section 12 (Printing of Name, CIN etc.) Every company shall get its name, address of registered office, CIN, telephone/Fax no. (if any) and email/website address (if any) printed on all business letters, bill heads, letter papers, notices and other official publications. CS Jitesh Gupta

One person company shall always be private limited company as per law Only natural person can form one person company and the limit is one OPC by any one person The person incorporating the one person company should be citizen of India and Resident in India also The condition of Indian Citizenship and residential status also apply to nominee of OPC The OPC can have a maximum of Rs. 50 lakhs Paid up capital and limit of Turnover of Rs. 2 Crore CS Jitesh Gupta

Small Company The small company shall always be private as per law Two or more person can form a small company Maximum number of members could not be more than 200 A company to be formed may be either:- Limited by shares Limited by guarantee An unlimited company CS Jitesh Gupta

Criteria of small company SMALL COMPANIES Having Maximum Paid up Share Capital Rs. 50 Lakhs OR Maximum Turnover as per last Audited Profit & Loss A/c of Rs. 2 Crores CS Jitesh Gupta

- Register of members, Debenture holders, (Registers) Every company to keep and maintain following registers in the specified format mentioned under Rules - Register of members, Debenture holders, security holders(Sec-88), index of the Registers. - Register of Directors and KMP (Sec-170) - Register of Charges(Sec-85) - Register of Contracts and arrangements in which director are Interested (Sec-189) - Register of Deposit (Sec-73&76) - Register of Investment made by company in its own name (187) CS Jitesh Gupta

- Register of Securities Bought Back (Sec-68) - Register of Employee Stock option Scheme (Rule 12 of Share Capital and Debentures Rules 2014) - Register of Transfer & Transmission of Share (Sec- 56) - Register of Sweat Equity Shares (Rule 8 (14)(a) of Share Capital and Debentures Rules 2014) - Register of Renewed and Duplicate Share Certificates (Rule 6(3)(a) of share Capital and Debentures Rules 2014) CS Jitesh Gupta

The registers shall be maintained at the registered office of the company Unless a special resolution is passed in a general meeting authorising the keeping of the register at any other place within the city, town or village in which the registered office is situated or any other place in India in which more than one-tenth of the total members entered in the register of members reside. CS Jitesh Gupta

All entries in register of members/Debenture holders to be authenticated by CS or any other authorized person and date of board resolution authorizing the same to be mentioned. Particulars shall be compiled within six months from the date of commencement of these rules. CS Jitesh Gupta

Section 96 (AGM) Every company other than a One Person Company shall in each year hold in addition to any other meetings, a general meeting as its Annual General Meeting and shall specify the meeting as such in the notices calling it, and not more than 15 months shall elapse between the date of one annual general meeting of a company and that of the next. In case of the first AGM, it shall be held within a period of 9 months from the date of closing of the first financial year of the company and in any other case, within a period of 6 months, from the date of closing of the financial year. CS Jitesh Gupta

Registrar may, for any special reason, extend the time within which any AGM, other than the first AGM, shall be held, by a period not exceeding three months AGM shall be held during business hours (9 a.m. to 6 p.m.) except National holiday at the registered office of the co. or within city or town or village where the registered office of the company is situated CS Jitesh Gupta

Section 101 (Notice of Meeting) Every General meeting can be convened by providing 21 clear days notice either in writing or in electronic mode. A general meeting may be called after giving a shorter notice if consent is given in writing or by electronic mode by not less than ninety-five per cent of the members entitled to vote at such meeting. CS Jitesh Gupta

Section 102 (Explanatory Statement) Every notice of a meeting shall specify the place, date, day and the hour of the meeting and shall contain a statement of the business to be transacted at such meeting. Section 102 (Explanatory Statement) Every explanatory statement annexed to the notice for special business shall provide requisite disclosure w.r.t. Directors, KMP, Promoters and there relatives (only for shareholding) CS Jitesh Gupta

Proxy shall have no right to speak or vote except on poll. Section 105 (Proxy) Any member of a company entitled to attend and vote at a meeting of the company shall be entitled to appoint another person as a proxy to attend and vote at the meeting on his behalf. Proxy shall have no right to speak or vote except on poll. A person can act as proxy on behalf of members not exceeding 50 and holding in the aggregate not more than 10% of total share capital of the company carrying voting rights. Proxy form shall be in form MGT-11. CS Jitesh Gupta

Section 108 & Clause 35B of Listing Agreement (e-Voting) e-Voting facility is mandatory at every general meeting for listed company and companies having shareholders 1000 or more. Note:- MCA has extended the period of its applicability till 31st December 2014 but under clause 35B of listing agreement amended by SEBI vide its circular dated 17th April 2014 it is applicable on above mentioned companies. CS Jitesh Gupta

- All public company with a paid up capital of Rs. 10 crore or more; Applicability - All listed companies - All public company with a paid up capital of Rs. 10 crore or more; - All public companies having turnover of Rs Rs. 100 Crore or more ; - All public companies, having an aggregate, outstanding loans or borrowings or debentures or deposits exceeding Rs. 50 crore or more. CS Jitesh Gupta

Composition of the committee:- Minimum 3 directors are required to constitute an audit committee with the majority of directors shall be independent directors Timeline:- every existing audit committee of the company immediately before the commencement of the act shall within 1 year with the commencement of this act shall comply with . CS Jitesh Gupta

VIGIL MECHANISM - companies which accepts deposits from the public Applicability - Every listed company - companies which accepts deposits from the public - companies which have borrowed money from banks and public financial institutions in excess of 50 crore rupees. The companies which are required to constitute an audit committee shall oversee the vigil mechanism through the committee . CS Jitesh Gupta

NOMINATION AND REMUNERATION COMMITTEE Applicability - All listed company - All public companies with a paid up capital of Rs. 10 crore or more - All public companies having turnover of Rs. 100 crore or more - All public companies, having in aggregate , outstanding loans or borrowings or debentures or deposits exceeding Rs. 50 crore or more. Composition:- Minimum 3 non-executive directors required to constitute a nomination and remuneration committee with the majority of directors shall be independent directors. CS Jitesh Gupta

STAKEHOLDERS RELATIONSHIP COMMITTEE Applicability:- The board of directors of a company which consist of more than 1000 shareholders, debenture holders, deposit holders and any other security holders at any time during a financial year shall constitute a stakeholders relationship committee . CS Jitesh Gupta

The provisions of this section shall apply to: - special resolution Section 117 (Resolutions to be filed) Copy of every resolution together with explanatory statement if any or agreement for the specified matters to be filled with ROC in Form MGT-14 within 30 days. The provisions of this section shall apply to: - special resolution -resolutions which have been agreed to by all the members of a company, but which, if not so agreed to, would not have been effective for their purpose unless they had been passed as special resolutions; CS Jitesh Gupta

- Any resolution of the Board or agreement executed by a company, relating to the appointment, re-appointment or renewal of the appointment, or variation of the terms of appointment, of a MD - Resolutions or agreements which have been agreed to by any class of members but which, if not so agreed to, would not have been effective for their purpose unless they had been passed by a specified majority or otherwise in some particular manner; and all resolutions or agreements which effectively bind such class of members though not agreed to by all those members; CS Jitesh Gupta

- Resolutions passed in pursuance of sub-section (3) of section 179; - Resolutions passed by a company according consent to the exercise by its Board of Directors of any of the powers under clause (a) and clause (c) of sub-section (1) of section 180;. - Resolutions requiring a company to be wound up voluntarily passed in pursuance of section 304; - Resolutions passed in pursuance of sub-section (3) of section 179; CS Jitesh Gupta

Section 179 (3) Power of Board The Board shall exercise the following powers on behalf of the company by means of resolutions passed at meetings of the Board, namely:— to make calls on shareholders in respect of money unpaid on their shares; to authorize buy-back of securities under section 68; to issue securities, including debentures, whether in or outside India; CS Jitesh Gupta

to invest the funds of the company; to borrow monies; to invest the funds of the company; to grant loans or give guarantee or provide security in respect of loans; to approve financial statement and the Board’s report; to diversify the business of the company; to approve amalgamation, merger or reconstruction; to take over a company or acquire a controlling or substantial stake in another company; CS Jitesh Gupta

to make political contributions Rule 8 of Companies (Meetings of Board and its Powers) Rules, 2014. In addition to the powers specified under sub-section (3) of section 179 of the Act, the following powers shall also be exercised by the Board only by means of resolutions passed at meetings of the Board. to make political contributions to appoint or remove key managerial personnel (KMP) to take note of appointment(s) or removal(s) of one level below the Key Management Personnel to appoint internal auditors and secretarial auditor CS Jitesh Gupta

to take note of the disclosure of director’s interest and shareholding - to buy, sell investments held by the company (other than trade investments), constituting five percent or more of the paid up share capital and free reserves of the investee company to invite or accept or renew public deposits and related matters to review or change the terms and conditions of public deposit to approve quarterly, half yearly and annual financial statements or financial results as the case may be. CS Jitesh Gupta

The pages shall be consecutively numbered. Section 118 (Minutes) Minutes of every meeting shall be entered in the minute book along with date of such entry, within 30 days of conclusion of such meeting (including resolutions passed by postal ballot) The pages shall be consecutively numbered. In the case of a meeting of the Board of Directors or of a committee of the Board, the minutes shall also contain - the names of the directors present at the meeting; And - in the case of each resolution passed at the meeting, the names of the directors, if any, dissenting from, or not concurring with the resolution. CS Jitesh Gupta

(a) is or could reasonably be regarded as defamatory of any person; or Minutes of the board meeting and general meeting shall be kept at the registered office in the custody of Company Secretary or any director authorised by the Board. There shall not be included in the minutes, any matter which, in the opinion of the Chairman of the meeting, (a) is or could reasonably be regarded as defamatory of any person; or (b) is irrelevant or immaterial to the proceedings; or (c) is detrimental to the interests of the company. The Chairman shall exercise absolute discretion in regard to the inclusion or non inclusion of any matter in the minutes on the grounds CS Jitesh Gupta

Section 120 (Records in Electronic Form) Every Listed company and company having not less than 1000 shareholders/debenture holders/security holders, may maintain its records in electronic form. (vide notification dated: 24th July, 2014) The word “shall” substituted by “may” In case of existing companies, data shall be converted from physical mode to electronic mode within six months from the date of notification of provisions of section 120 of the Act. CS Jitesh Gupta

(a) the records are maintained in the formats as required under the Act (b) the information as required under the provisions of the Act should be adequately recorded for future reference (c) the records must be capable of being readable, retrievable and reproducible in printed form CS Jitesh Gupta

(d) the records are capable of being dated and signed digitally wherever it is required under the provisions of the Act or the rules made thereunder (e) the records, once dated and signed digitally, shall not be capable of being edited or altered (f) the records shall be capable of being updated, according to the provisions of the Act or the rules made there under, and the date of updating shall be capable of being recorded on every updating. CS Jitesh Gupta

Section 149(1) (Woman Director) The following classes of companies shall have at least one woman director:- - Every Listed company - Public company having paid up share capital Rs. 100 Crore or more - Public company having turnover of Rs. 300 Crore or more Every company existing on or before the date of commencement of this Act shall within one year from such commencement comply with the requirements of the provision. CS Jitesh Gupta

(MCA clarified vide circular dated: 26th June, 2014) Section 149 (3) Every company shall have at least one director who has stayed in India for a total period of not less than 182 days in the previous calendar year. (MCA clarified vide circular dated: 26th June, 2014) It is clarified that the residency requirements would be reckoned from 01/04/2014. The first previous calendar year for compliance of this section, therefore be calendar year 2014. The period to be taken into account for compliance with these provisions will be the remaining period of calendar year 2014 i.e. 1st April to 31st December, 2014. Therefore on proportionate basis the number of days can be calculated. CS Jitesh Gupta

Section 149 (Independent Director) Every listed company shall have at least 1/3rd of total number of directors as independent director Following class of public companies shall have at least 2 Independent Director: - having paid up share capital Rs. 10 Crore or more - having turnover of Rs. 100 Crore or more - having aggregate outstanding loan, debenture and deposits exceeding Rs. 50 Crore CS Jitesh Gupta

- but not later than Next Board Meeting - 3 months from such vacancy If a Company required to appoint higher numbers of independent directors due to composition of Audit Committee, such higher number of Independent Directors shall be applicable to it Any intermittent vacancy of Independent Director shall be filled by the Board at the earliest - but not later than Next Board Meeting - 3 months from such vacancy Whichever is later CS Jitesh Gupta

- At the first meeting in which he participates as a director Every independent director shall give a declaration that he meets a criteria of Independence as under: - At the first meeting in which he participates as a director - At the first meeting of the Board in each financial year - Whenever any change in circumstances which affects his status as independent director. CS Jitesh Gupta

Eligible for reappointment by passing SR. Co. and independent director shall abide by schedule IV (code for independent directors) An independent director shall hold office for a term upto 5 consecutive years Eligible for reappointment by passing SR. Disclosure of appointment in board report. Retiring by rotation - not applicable Note:- Appointment of independent director shall be approved in general meeting and explanatory statement shall indicate justification for choosing such person (Ref. to Section 150(2)) CS Jitesh Gupta

Qualification of Independent Director Shall possess appropriate skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration, research, corporate governance, technical operations or other disciplines related to the company’s business Creation and Maintainenece of Data Bank of persons offering to become Independent Director Such Data Bank shall be placed on website of MCA CS Jitesh Gupta

For name inclusion in Data Bank - Application in Form DIR-1 to the Agency - The agency may charge reasonable fee from the Applicant Intimate the Agency If any Changes of particulars of the person within 15 days of such change CS Jitesh Gupta

Section 165 (Number of Directorship) No person shall be appointed as director in more than 20 Companies. Maximum no. of public companies can be 10. Time limit – 1 year from commencement of this act. CS Jitesh Gupta

Section 184 (Disclosure of Interest by Director) Every director at: - First meeting in which he participates as a director and thereafter - First meeting of board in every F.Y. - whenever any change in disclosure Shall disclose in form MBP-1, his concern or interest in any co., body corporate, firm or other association of individual (including shareholding interest) Note:- If Shareholding exceed 2% CS Jitesh Gupta

Section 203 (KMP) Every listed company Public Company having paid-up share capital of Rs. 10 Crore or more shall have the following KMP MD or CEO or Manager and in their absence WTD Company Secretary CFO CS Jitesh Gupta

(Rule 8A: Private Company having paid-up share capital of Rs (Rule 8A: Private Company having paid-up share capital of Rs. 5 Crore or more shall have a Whole-Time Company Secretary) Appointment of every KMP by Board Resolution including T&C with remuneration. Any casual vacancy to be filled in by the Board at its meeting within 6 months. CS Jitesh Gupta

the articles of such a company provide otherwise; or An individual shall not be appointed or reappointed as the Chairperson as well as the MD or CEO of the company at the same time unless: the articles of such a company provide otherwise; or (b) the company does not carry multiple businesses CS Jitesh Gupta

A company may appoint a person as its MD, if he is the MD or manager of one, and of not more than one, other company and such appointment 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 CS Jitesh Gupta

A Whole-Time KMP shall not hold office in more than one company except in its subsidiary company at the same time A KMP is entitled to be appointed as director of any company with the permission of the Board A Whole-time KMP holding office in more than one company at the same time on the date of commencement of this Act, shall, within a period of six months from such commencement, choose one company, in which he wishes to continue to hold the office of KMP CS Jitesh Gupta

MCA has notified the criteria for CEO appointment vide Notification dated 25th July, 2014 The public companies having paid-up share capital of Rs. 100 crore or more and annual turnover of Rs. 1000 crore or more which are engaged in multiple businesses and have appointed Chief Executive Officer for each such business shall be the class of companies for the purposes of the second proviso to sub-section (1) of Section 203 of the said Act For the above purposes, the paid-up share capital and the annual turnover shall be decided on the basis of the latest audited balance sheet CS Jitesh Gupta

- Public companies having Paid-up capital of Rs. 50 Crore or more OR Section 204 (SECRETARIAL AUDIT) - Every listed company - Public companies having Paid-up capital of Rs. 50 Crore or more OR - Turnover of Rs. 250 Crore or more Shall have Secretarial Audit Report from PCS in Form- MR-3, annexed to Board Report CS Jitesh Gupta

It shall be the duty of the company to give all assistance and facilities to the PCS, for auditing the secretarial and related records of the company The Board of Directors in their report, shall explain in full any qualification or observation or other remarks made by the company secretary in practice in his report CS Jitesh Gupta

Annual Return Contains the following particulars: Section 92 (Annual Return) Annual Return to be prepared in Form No. MGT-7 with particulars as on the date of close of FY, to be filed with ROC within 60 days of AGM. Annual Return Contains the following particulars: its registered office, principal business activities, particulars of its holding, subsidiary and associate companies; its shares, debentures and other securities and shareholding pattern; CS Jitesh Gupta

its indebtedness; its members and debenture-holders along with changes therein since the close of the previous financial year; its promoters, directors, key managerial personnel along with changes therein since the close of the previous financial year; meetings of members or a class thereof, Board and its various committees along with attendance details; CS Jitesh Gupta

its members and debenture-holders along with changes therein since the close of the previous financial year; its promoters, directors, key managerial personnel along with changes therein since the close of the previous financial year; meetings of members or a class thereof, Board and its various committees along with attendance details; remuneration of directors and key managerial personnel; CS Jitesh Gupta

penalty or punishment imposed on the company, its directors or officers and details of compounding of offences and appeals made against such penalty or punishment; matters relating to certification of compliances, disclosures, details, in respect of shares held by or on behalf of the Foreign Institutional Investors indicating their names, addresses, countries of incorporation, registration and percentage of shareholding held by them CS Jitesh Gupta

Signing of Annual Return By a Director and a CS Where no CS, by a PCS For OPC and Small Companies By a CS Where no CS, by a Director CS Jitesh Gupta

Certification of Annual Return Applicable for: Listed Company Companies having paid-up share capital of Rs. 10 Crore or more OR Companies having Turnover of Rs. 50 Crore or more, by a Company Secretary in practice and the certificate shall be in Form No. MGT-8 Extract of Annual Return in Form MGT-9 to be annexed to the Board Report CS Jitesh Gupta

Section 93 ( Change in Shareholding ) Form MGT-10 to be filed with ROC within 15 days of any change for 2% or more, in shareholding position of promoters and top ten shareholders. CS Jitesh Gupta

Section 152 (Appointment of Director) DIN is Mandatory (Note: For getting the DIN, Digital Signature is also mandatory of the Applicant) Consent in Form DIR-2 is mandatory before appointment as a director and to be filed with ROC within 30 days Appointment only in General Meeting. Additional & Alternate can be appointed in BOD if articles has authorising clause. CS Jitesh Gupta

1/3rd of the rotational directors shall retire from office. RETIRE BY ROTATION Unless the Article provide, not less than 2/3rd of the total number of directors of a public company shall be rotational directors and be eligible for appointment. 1/3rd of the rotational directors shall retire from office. CS Jitesh Gupta

Section 160 (Right of person other than to stand for Directorship) A person other than retiring director shall be eligible for appointment as director, provided a member nominates him at least 14 days before the meeting and deposits Rs. 1 Lacs (refundable on successful appointment). CS Jitesh Gupta

Annual disclosure shall also be taken Section 164 (Disclosure of disqualification of Director) Declaration of disqualification from director at the time of appointment or re appointment in Form DIR-8 Annual disclosure shall also be taken CS Jitesh Gupta

Section 167 (vacation of office of Director) If incurs disqualification under section 164 If absents from all meeting in 12 months with or without leave of absence If breach of RPT disclosures he fails to disclose his interest in any contract or arrangement in which he is directly or indirectly interested, in contravention of the provisions of section 184 he becomes disqualified by an order of a court or the Tribunal CS Jitesh Gupta

he is convicted by a court of any offence, whether involving moral turpitude or otherwise and sentenced in respect thereof to imprisonment for not less than 6 months office shall be vacated by the director even if he has filed an appeal against the order of such court he is removed in pursuance of the provisions of this Act he, having been appointed a director by virtue of his holding any office or other employment in the holding, subsidiary or associate company, ceases to hold such office or other employment in that company CS Jitesh Gupta

Section 168 (Resignation of Director) Director to intimate his resignation to the company which the company shall file with ROC in form DIR-12 within 30 days Company to put resignation details on its website and its board report Director is also required to send his resignation letter to ROC in form DIR-11 within 30 Days along with reason of resignation (Note: For filing the form DIR-11, Digital Signature of Resigning Director is also mandatory. CS Jitesh Gupta

Sectiob-180 (Restrictions on power of board) Board to exercise following powers only with prior approval of shareholders by Special Resolution: Sell, lease, dispose-off undertaking or substantial the whole of undertaking. To invest otherwise in trust securities the amount of compensation received by it as a result of any merger or amalgamation To borrow money in excess of paid-up capital and free reserves. To give time to director for re-payment of debt to remit, or give time for the repayment of, any debt due from a director. CS Jitesh Gupta

Every special resolution passed by the company in general meeting in relation to the exercise of the powers of Board shall specify the total amount up to which monies may be borrowed No debt incurred by the company in excess of the limit imposed by under this section shall be valid or effectual, unless the lender proves that he advanced the loan in good faith and without knowledge that the limit imposed by that clause had been exceeded CS Jitesh Gupta

Section 185 (Loan to Directors) Unless specifically provided, no company shall directly or indirectly advance any loan /guarantee or provide security in connection with loan, to any director or any other person in which director is interested CS Jitesh Gupta

Any other person in which director is interested shall include:- - any director of lending company or of a company which is its holding company or any partner/relative of such director; - any firm in which such director or relative is partner; - any private company in which such director is director or member; CS Jitesh Gupta

- body corporate at general meeting of which 25% or more of voting power is exercised/controlled by one or more directors - body corporate , whose board of directors, MD or manager is accustomed to act in accordance with directions and instructions of the board or any director of a lending company CS Jitesh Gupta

Clarification vide MCA circular dated 25/03/2014 It is clarified that the resolution passed under section 293 of the co. act, 1956 prior to 12/09/2013 with reference to borrowings (subject to limits prescribed) and/ or creation of security on assets of the company will be regarded as sufficient compliance of the requirements of Section 180 of the Co. Act, 2013 for a period of one year from the date of notification of section 180 of the act. CS Jitesh Gupta

Loan to director provisions shall not apply to:- - giving of loan to MD/ WTD as a part of condition of services extended to all employees or pursuant to scheme approved by members as special resolution or pursuant to any scheme approved by the members by a special resolution - a company which in ordinary course of business provides loan/guarantee/security for the due repayment of any loan with ROI being charged not less than declared by RBI CS Jitesh Gupta

- any loan made by holding company to its WOS or guarantee/ security by holding company to any loan made to WOS - any guarantee/ security by holding company to any loan made by bank /FI to its subsidiary. CS Jitesh Gupta

Section 186 (Inter-Corporate Loans and Advances) Company shall not make any investment through more than 2 layers of investment companies Exceptions: - acquiring companies outside India, if Such company has investments subsidiaries beyond 2 layers as per local law - a subsidiary company from having any investment subsidiary for the purposes of meeting the requirements under any law or under any rule or regulation framed under any law for the time being in force CS Jitesh Gupta

No company shall directly/ indirectly:- - give any loan to any person or other body corporate - give guarantee/ provide security in connection with loan to any other person/ body corporate - acquire by way of subscription, purchase or other wise, securities of any body corporate. Exceeding 60% of paid up share capital, free reserves and securities premium account or 100% of free reserves and securities premium account, whichever is more CS Jitesh Gupta

Disclosure to be made in Financial statements In case of exceeding the limits, prior approval by share holders by special resolution shall be required Special resolution not required in case of loan/ guarantee/security to WOS or JV or acquisition by holding company in WOS Disclosure to be made in Financial statements Unanimous board resolution at the meeting is required for all loan/investments/security CS Jitesh Gupta

No loan shall be given at the rate lower than prescribed yield rate No company which is in default in the repayment of any deposits accepted before or after the commencement of this Act or in payment of interest thereon, shall give any loan or give any guarantee or provide any security or make an acquisition till such default is subsisting Every company to maintain register in manual/ electronic form in MBP-2 from the date of incorporation kept at registered office (Clarification vide circular dated: 9th June, 2014) Registers maintained by companies Under section 372A of co. act, 1956 may continue as per old law and the new format in MBP-2 shall be used for particulars entered in such registers on and from 1/04/2014. Entries to be made chronological order, within 7 days of such event and authenticated by CS or any other person authorised by board CS Jitesh Gupta

Section 186 shall not apply to: - banking companies, insurance companies, housing finance companies, business finance companies etc - to any acquisition made by NBFC or investment company or right issue CS Jitesh Gupta

Section 188 (Related Party Transactions) Prior approval of the company by a special resolution is required for the following transactions:- a) sale, purchase or supply of any goods or materials b) selling or otherwise disposing of, or buying, property of any kind c) leasing of property of any kind CS Jitesh Gupta

d) availing or rendering of any services e) appointment of any agent for purchase or sale of goods, materials, services or property f) such related party's appointment to any office or place of profit in the company, its subsidiary company or associate company g) underwriting the subscription of any securities or derivatives thereof, of the company CS Jitesh Gupta

With the following criteria - Sale, purchase or supply of any goods or materials, directly or through appointment of agent, exceeding 10% of the turnover or Rs. 100 crore, whichever is lower [for the points (a) and (e)] - Selling or otherwise disposing of or buying property of any kind, directly or through appointment of agent, exceeding 10% of net worth of the company or Rs.100 crore whichever is lower [for the points (b) and (e)] CS Jitesh Gupta

- Leasing of property of any kind exceeding 10% of the net worth of the company or 10% of turnover or Rs.100 crore whichever is lower [for the point (c)] - Availing or rendering of any services, directly or through appointment of agent, exceeding 10% of the turnover or Rs. 50 Crore whichever is lower [for the points (d) and (e)] Explanation:- The above limits shall apply for transactions to be entered into either individually or taken together with previous transaction during in a financial year CS Jitesh Gupta

Is for appointment to any office or place of profit in the company, its subsidiary or associate company at a monthly remuneration exceeding Rs.2,50,000 [for the point (f)] Is for remuneration for underwriting the subscription of any securities or derivatives thereof of the company exceeding 1% of the net worth [for the points (g)] Explanation :- the turnover or net worth shall be computed on the basis of the audited financial statement of the preceding financial year CS Jitesh Gupta

(a) name of the related party; In case of wholly owned subsidiary, the special resolution passed by the holding company shall be sufficient for the purpose of entering into the transactions between wholly owned subsidiary and holding company The explanatory statement to be annexed to the notice of a general meeting convened pursuant to section 101 shall contain the following particulars namely:- (a) name of the related party; (b) name of the director or key managerial personnel who is related, if any; (c) nature of relationship; (d) nature, material terms, monetary value and particulars of the contract or arrangement; (e) any other information relevant or important for the members to take a decision on the proposed resolution. CS Jitesh Gupta

Provisions of this Section not apply to: - ordinary course of business No member of the company shall vote on such special resolution, to approve any contract or arrangement which may be entered into by the company, if such member is a related party Provisions of this Section not apply to: - ordinary course of business - arms length CS Jitesh Gupta

Vide circular dated 17th July, 2014 MCA clarified that: It is clarified that transactions arising out of compromises, Arrangements and Amalgamations dealt with under specific provisions of the Co. Act, 1956/ Co. Act, 2013 will not attract the requirements of this Section. Contracts entered into by companies, after making necessary compliances under co. act, 1956 which already come into affect before the commencement of section 188 of co. act, 2013, will not require fresh approval under the said section 188 till the expiry of the original term of such contracts. Thus, if any modification in such contract is made on or after 1st April, 2014, requirements under section 188 will have to comply with. CS Jitesh Gupta

Section 189 (Register of contract or arrangement in which directors are interested) Every company shall keep 1 or more registers in form MBP-4 containing the particulars of all contracts to which section 184 & 188 applies After entering the details the registers shall be placed before the next board meeting and signed by all directors present CS Jitesh Gupta

Exceptions: - any contract or arrangements for sale, purchase or supply of any goods, material or services not exceeding 5 lakhs in the aggregate in any year - banking company for collections of bill in ordinary course of business CS Jitesh Gupta

Section 196 (Appointment of MD, WTD or Manager) No company shall appoint MD and a manager at the same time No company shall appoint MD, WTD or Manager for a term exceeding 5 years at a time CS Jitesh Gupta

a) is below the age of 21 years or has attained the age of 70 years No company shall appoint or continue the employment of any person as MD, WTD or manager who:- a) is below the age of 21 years or has attained the age of 70 years (S.R. required for appointment of persons age of exceeding 70 years) b) is an undischarged insolvent or has at any time been adjudged as an insolvent c) has at any time suspended payment to his creditors or makes, or has at any time made, a composition with them d) has at any time been convicted by a court of an offence and sentenced for a period of more than six months CS Jitesh Gupta

MD, WTD or manager to appointed and terms/remuneration to be approved by the board at its meeting, subject to the approval of shareholders approval at next general meeting and CG if required Return of a appointment of MD/ WTD/ Manager/ CEO/ CS/ CFO to be filled with ROC in form MR-1 within 60 days CS Jitesh Gupta

Section 197 (Managerial Remuneration) Total managerial remuneration of a public company not to exceed 11% of Net profit The cap of 11% can exceed subject to shareholders and CG approval except with the approval in general meeting: - MR to one MD/ WTD/ Manager not to exceed 5% - MR to all such MD/ WTD/ manager no to exceed 10% - MR to non- executive director no to exceed 1% (in case there is MD etc.) and 3% (in case there is no MD etc.) (Note: MR not to include Sitting Fees) In case of inadequate/no profits, MR to be paid in accordance with Schedule V and CG approval, as the case may be CS Jitesh Gupta

MEETINGS Section 173 (Board Meeting) Applicability: All Companies First meeting : within 30 days of the date of its incorporation Subsequent meeting : minimum 4 meeting in a year & maximum gap between 2 meeting shall not be more than 120 days OPC, Small Co. , Dormant Co. can meet at least 1 time in each half of a calendar year and the gap between 2 meetings shall not be less than 90 days CS Jitesh Gupta

Minimum 7 days notice required Shorter notice: may be called if at least one independent director shall be present at meeting In case of absence of independent director, decisions taken at such a meeting shall be circulated to all the directors and shall be final only on ratification thereof by at least one independent director if any. CS Jitesh Gupta

Quorum of Board Meeting The quorum for a board meeting shall be 1/3rd of its total strength or 2 director whichever is higher The participation of the director by video conferencing or by other audio visual means shall also be counted for the purpose of quorum If number of interested directors exceeds or is equal to 2/3rd of the total strength of the Board, the number of directors who are not interested directors and present at the meeting, being not less than 2, shall be the quorum If the quorum of the board could not be held then, unless the articles of the co. provide otherwise, the meeting shall automatically stand adjourned to the same day at the same time and place in the next week or if that day is national holiday, till the next succeeding day CS Jitesh Gupta

Every company shall make necessary arrangements to avoid failure of video or audio visual connection The chairperson of the meeting and the company secretary, if any shall take due and reasonable care The notice of meeting shall inform the directors regarding the option available to them to participate through video conferencing or other audio visual means A director intending to participate through video conferencing or audio visual means shall communicate his intention to the chairperson or the CS of the company CS Jitesh Gupta

Applicability:- every company other than OPC First meeting:- Every company to which this section applies shall hold its first AGM within 9 months from the closure of its financial year Subsequent AGM:- within 6 months of closure of its financial year Gap between 2 AGM would not be more than 15 months and in case of first AGM it is not necessary to hold the AGM in the year of incorporation CS Jitesh Gupta

Every listed companies are required to prepare report on each AGM including the confirmation to the effect that the same was convened, held and conducted as per the provisions of the act. The copy of the report shall be filled with ROC within 30 days from the date of conclusion of AGM. Penalty or Consequences:- company:- Minimum Rs. 1,00,000 which may extend to Rs.5,00,000 Officer in Default:- Rs.25,000 which may extend to Rs.1,00,000 CS Jitesh Gupta

EGM The board may whenever think necessary call general meeting of the company Calling of EGM by requisition:- - Board on requisition made by member holding on the date of receipt of requisition at least 1/10th of share capital carrying voting rights or 1/10th of total voting power may proceed to call EGM - if board fails to call EGM within 20 days from receipt of a valid requisition in regard to any method on a day not later than 45 days from the date of receipt of such requisition, the meeting may be called and held by requisitionists themselves within a period of 3 months from the day of requisition. CS Jitesh Gupta

Minimum 21 clear days notice either in writing or through electronic mode required. Such notice shall specify the day, date, time and place and hour of the meeting and a statement of the business to be transacted at such meeting. Note:- Accidental omission to give notice or non – receipt of such notice shall not invalidate the proceedings of the meeting. CS Jitesh Gupta

Explanatory statement A statement setting out the following material shall be annexed to the notice calling such meeting - the nature of concern or interest, financial or otherwise if any in respect of each items of every director and the manager if any every other KMP and relative of such director or manager or KMP. - any other information and facts that they may that enable members to understand the meaning and implications of the item of business and to take decision there of CS Jitesh Gupta

Special Business In the case of an AGM all business to transacted there at shall be deemed special, other than : - Consideration of financial statement and board report - Declaration of dividend - appointments of directors in place of those retiring - appointment of, and the fixing of the remuneration of, the auditors. In case of any other meeting, all business shall be deemed to be special. CS Jitesh Gupta

Unless the articles of the company provide for larger no. - 5 members personally present if the number of members as on the date of meeting is not more than 1000 - 15 members personally present if the no. of members as on the date of meeting is more than 1000 but up to 5000 - 30 members personally present if the number of member as on the date of the meeting exceeds 5000 For private company - 2 members personally present, shall be the quorum for a meeting of the company CS Jitesh Gupta

CHAIRMAN OF THE MEETING - Articles of the company may provide different manner for appointing the chairman - The members personally present at the meeting shall elect one of themselves to be the chairman thereof on a show of hands - If a poll is demanded on the election of the chairman, it shall be taken forthwith in accordance with the provisions of this act and the chairman elected on a show of hands shall continue to be the chairman of the meeting until some other person is elected as chairman as a result of the poll, and such other person shall be the chairman for the rest of the meeting CS Jitesh Gupta

CLSS (Company Law Settlement Scheme) It is a one time opportunity for all defaulting companies Companies who have not filled their annual reports, financial statements and related documents due for filling on or before 30/06/2014 can file these documents from 15/08/2014 to 15/10/2014 and can avail of the following benefits: - pay only 25% of additional fees and - enjoy immunity from prosecution - directors will also not be disqualified under Sec 164(2) of the companies act, 2013 CS Jitesh Gupta

Professional Indemnity Insurance This policy is meant for professionals to cover liability falling on them as a result of errors and omissions committed by them while rendering professional services The policy covers all sums which the insured professional becomes legally liable to pay as damages to third party in respect of any error or omission on his/her part committed while rendering professional services The legal cost and expenses incurred in defense of the case, with the prior consent of the insurance company are also payable subject to the overall limit of indemnity selected The policy offers a benefit of retroactive period on continuous renewal of policy where by claims reported in subsequent renewal but pertaining to earlier period after first inception of the policy also become payable CS Jitesh Gupta

CS Jitesh Gupta # 9810043622 jitesh@jkgupta.com www.jkgupta.com