1 / 22

Companies Act, 201 3 Definitions

Companies Act, 201 3 Definitions. Siddhartha Murarka FCS, LL.B, B.Com (H) Ghosh & Murarka Legal , Solicitors & Advocates 12 Waterloo Street, Kolkata 700 069 Mobile: +91 99033 77959 Email: siddharthamurarka@gmail.Com. Basic Concept. definitions. associate company [Sec 2(6)].

inez-harmon
Download Presentation

Companies Act, 201 3 Definitions

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Companies Act, 2013Definitions SiddharthaMurarkaFCS, LL.B, B.Com(H) Ghosh & MurarkaLegal, Solicitors & Advocates12 Waterloo Street, Kolkata 700 069Mobile: +91 99033 77959Email: siddharthamurarka@gmail.Com

  2. Basic Concept

  3. definitions

  4. associate company [Sec 2(6)] “associate company”, in relation to another company, means a company in which that other company has a significant influence, but which is not a subsidiary company of the company having such influence and includes a joint venture company. Explanation.—For the purposes of this clause, “significant influence” means control of at least twenty per cent of total share capital, or of business decisions under an agreement. {New Definition}

  5. body corporate [Sec 2(11)] “body corporate” or “corporation” includes a company incorporated outside India, but does not include— {Read with S. 2(87)} a co-operative society registered under any law relating to co-operative societies; and any other body corporate (not being a company as defined in this Act), which the Central Government may, by notification, specify in this behalf.

  6. Company [Sec 2(20)]“company” means a company incorporated under this Act or under any previous company law.{Read with S. 2(87)} Company SECRETARY OR SECRETARY [Sec 2(24)] “Company Secretary” or “Secretary” means a Company Secretary as defined in clause (c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980 (member of ICSI) who is appointed by a company to perform the functions of a company secretary under this Act. “and includes any other individual possessing the prescribed qualifications” has been deleted which used to allow many other professionals to act as CS in certain class of companies.

  7. Control [Sec 2(27)] “control” shall include the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in any other manner. {New Definition in line with SEBI SAST}

  8. Director [Sec 2(34)] “director” means a director appointed to the Board of a company. In the definition under 1956 Act, “any person occupying the position of director, by whatever name called” used to include in its ambit de facto directors but now only de jure directors would be covered.

  9. financial statement [Sec 2(40)] “financial statement” in relation to a company, includes— a balance sheet as at the end of the financial year; a profit and loss account, or in the case of a company carrying on any activity not for profit, an income and expenditure account for the financial year; cash flow statement for the financial year; a statement of changes in equity, if applicable; and any explanatory note annexed to, or forming part of, any document referred to in sub-clause (i) to sub-clause (iv). Provided that the financial statement, with respect to OPC, small company and dormant company, may not include the cash flow statement.

  10. financial year [Sec 2(41)] “financial year”, in relation to any company or body corporate, means the period ending on the 31st day of March every year, and where it has been incorporated on or after the 1st day of January of a year, the period ending on the 31st day of March of the following year, in respect whereof financial statement of the company or body corporate is made up: Provided that on an application made by a company or body corporate, which is a holding company or a subsidiary of a company incorporated outside India and is required to follow a different financial year for consolidation of its accounts outside India, the Tribunal may, if it is satisfied, allow any period as its financial year, whether or not that period is a year: Provided further that a company or body corporate, existing on the commencement of this Act, shall, within a period of two years from such commencement, align its financial year as per the provisions of this clause.

  11. foreign company [Sec 2(42)] “foreign company” means any company or body corporate (new inclusion) incorporated outside India which— has a place of business in India whether by itself or through an agent, physically or through electronic mode; and conducts any business activity in India in any other manner.

  12. key managerial personnel [Sec 2(51)] “key managerial personnel”, in relation to a company, means— the Chief Executive Officer or the managing director or the manager; the company secretary; the whole-time director; the Chief Financial Officer; and such other officer as may be prescribed.

  13. officer who is in default [Sec 2(60)] “officer who is in default”, 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 penalty or punishment by way of imprisonment, fine or otherwise, means any of the following officers of a company, namely:— • whole-time director; • key managerial personnel; • where there is no key managerial personnel, such director or directors as specified by the Board in this behalf and who has or have given his or their consent in writing to the Board to such specification, or all the directors, if no director is so specified; • any person who, under the immediate authority of the Board or any key managerial personnel, is charged with any responsibility including maintenance, filing or distribution of accounts or records, authorises, actively participates in, knowingly permits, or knowingly fails to take active steps to prevent, any default; Contd…

  14. Contd… any person in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act, other than a person who gives advice to the Board in a professional capacity; every director, in respect of a contravention of any of the provisions of this Act, who is aware of such contravention by virtue of the receipt by him of any proceedings of the Board or participation in such proceedings without objecting to the same, or where such contravention had taken place with his consent or connivance; in respect of the issue or transfer of any shares of a company, the share transfer agents, registrars and merchant bankers to the issue or transfer.

  15. private company [Sec 2(68)] “private company” means a company having a minimum paid-up share capital of one lakh rupees or such higher paid-up share capital as may be prescribed, and which by its articles,— restricts the right to transfer its shares; except in case of One Person Company, limits the number of its members to two hundred: Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member: Provided further that— persons who are in the employment of the company; and persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased, shall not be included in the number of members; and prohibits any invitation to the public to subscribe for any securities of the company; Restriction on accepting Deposits omitted due to applicability of Section 73 and 76.

  16. public company [Sec 2(71)] “public company” means a company which— is not a private company; has a minimum paid-up share capital of five lakh rupees or such higher paid-up capital, as may be prescribed: Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles.

  17. related party [Sec 2(76)] “related party”, with reference to a company, means— a director or his relative; a key managerial personnel or his relative; a firm, in which a director, manager or his relative is a partner; a private company in which a director or manager is a member or director; a public company in which a director or manager is a director ORANDholds along with his relatives, more than two per cent of its paid-up share capital; any body corporate whose Board of Directors, managing director or manager is accustomed to act in accordance with the advice, directions or instructions of a director or manager; any person on whose advice, directions or instructions a director or manager is accustomed to act: Provided that nothing in sub-clauses (vi) and (vii) shall apply to the advice, directions or instructions given in a professional capacity; Contd…

  18. Contd… any company which is— a holding, subsidiary or an associate company of such company; or a subsidiary of a holding company to which it is also a subsidiary; such other person as may be prescribed – Director (except ID) {amendment 17.07.2014} or KMP of Holding Company.

  19. small company [Sec 2(85)] ‘‘small company’’ means a company, other than a public company— paid-up share capital of which does not exceed fifty lakh rupees or such higher amount as may be prescribed which shall not be more than five crore rupees; OR turnover of which as per its last profit and loss account does not exceed two crore rupees or such higher amount as may be prescribed which shall not be more than twenty crore rupees. See a funny small company- Paid-up capital- 40 lakhs Securities Premium - 40 Crores (100 times) Turnover - 1000 Crores Profits - 50 Crores (5% margin)

  20. subsidiary company [Sec 2(87)] “subsidiary company” or “subsidiary”, in relation to any other company (that is to say the holding company), means a company in which the holding company— controls the composition of the Board of Directors; or exercises or controls more than one-half of the total share capital (paid-up equity capital + convertible preference capital) either at its own or together with one or more of its subsidiary companies: Provided that such class or classes of holding companies as may be prescribed shall not have layers of subsidiaries beyond such numbers as may be prescribed. Explanation.—For the purposes of this clause,— a company shall be deemed to be a subsidiary company of the holding company even if the control referred to in sub-clause (i) or sub-clause (ii) is of another subsidiary company of the holding company; the composition of a company’s Board of Directors shall be deemed to be controlled by another company if that other company by exercise of some power exercisable by it at its discretion can appoint or remove all or a majority of the directors; the expression “company” includes any body corporate; “layer” in relation to a holding company means its subsidiary or subsidiaries.

  21. Section 4(7) of 1956 Act A private company, being a subsidiary of a body corporate incorporated outside India, which, if incorporated in India, would be a public company within the meaning of this act, shall be deemed for the purposes of this act to be a subsidiary of a public company if the entire share capital in that private company is not held by that body corporate whether alone or together with one or more other bodies corporate incorporated outside India. {However, Circular No. 23/2014 dated 25th June 2014 has replaced the phrase “body corporate incorporated outside india” with “company incorporated outside india” which has left several MNC professional services companies which are subsidiaries of foreign LLP’s uncovered.

  22. THANK YOU !! SiddharthaMurarkaFCS, LL.B, B.Com(H) Ghosh & MurarkaLegal, Solicitors & Advocates12 Waterloo Street, Kolkata 700 069Mobile: +91 99033 77959Email: siddharthamurarka@gmail.Com

More Related