THE COMPANIES ACT, 2013 (Important Provisions)

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Presentation transcript:

THE COMPANIES ACT, 2013 (Important Provisions) Presented By: CS Dhanraj Singh Thakur Practising Company Secretary & Designated Partner Athena Business Advisors (India) LLP

WHAT IS A COMPANY??? A company is an association or collection of individuals, whether natural persons, legal persons, or a mixture of both.

BACKGROUND OF THE ACT The Companies Act 2013 is an Act of the Parliament of India which regulates incorporation of a company, responsibilities of a company, directors, dissolution of a company.

PRELIMINARY PROVISIONS

TYPES OF COMPANIES By Liability Limited Liability Unlimited Liability By Constitution Private Limited Public Limited Section 8 One Person Company By Listing Unlisted Listed

DIRECTORS The Director of a Company occupies the position: As a Trustee- In relation to the company As Agents- When they act on behalf of the company As Managing Partner- As they are entrusted with the responsibility of the company The Director of a Company occupies the position: If acts are done by the director prior to he or she being disqualified, the acts are considered to be valid.

RELEVANT SECTIONS PURSUANT TO DIRECTORS Section 149- Company to have Board of Directors Section 150- Manner of Selection of Independent directors and maintenance of databank of independent directors Section 152- Appointment of Directors Section 153- Application for allotment of DIN Section 155- Prohibition to obtain more than one DIN Section 161- Appointment of additional, alternate and nominee director Section 164- Disqualification for appointment of directors Section 165- Number of Directorships

Duties of Directors To act honestly and with good faith. Not to use confidential information of the company for their own purpose. Duty of Care and to act reasonably while acting for the company. FIDUCIARY DUTIES Not to contract with company, where he/she or his relative has an interest in the contract where he/she has a interest, they need to inform the board or seek prior approval while entering into contract, otherwise the contract is voidable. Duty to attend and Duty not to delegate. STATUTORY DUTIES

Duties of Directors Statutory Returns can only be filed with ROC in time when they are prepared in time. The Board should ensure that accounts are audited in time and AGM has been held in time. A Director of a Company shall not assign his office and any assignment so made shall be void.

Liabilities of Directors -The liability of the Directors can be either civil or criminal. -Liability may be for breach of fiduciary duties -The directors are personally liable for the following: a) Ultra vires acts b) Malafide acts c) Negligent acts d) Liability for the acts of third parties

DIN AND DIGITAL SIGNATURE(DSC) DIN denotes Director Identification Number It is an unique Identification Number allotted to an individual who is an existing Director of a company or intends to be appointed as Director of a company pursuant to Section 153 & 154 of the Companies Act, 2013. Every person who is required to be appointed as Director of any company is required to have a DIN & DSC.

DIN AND DIGITAL SIGNATURE(DSC) - All filings done by the companies under MCA21 e-Governance programme are required to be filed with the use of Digital Signatures by the person authorized to sign the documents such as Director etc. - DIN can be obtained by filing the form with DIN Cell with PAN No. and Address proof along with passport size photograph. - By DIN, a person can easily be identified in how much companies, he is a director and in which capacity all over the country including Public, Private or otherwise.

How to assess information of Directors through MCA Portal

SHARE CAPITAL SHARE: Share is a small unit of share capital of the company. It is “an interest having a money value and made up of diverse rights specified under the articles of association”. SHARE CAPITAL: Share capital means the capital raised by the company by issue of shares. Share gives a right to participate in the profits of the company, or a share in the assets when the company is going to be wound up.

*Equity or ordinary shares KINDS OF SHARE CAPITAL *Preference shares *Redeemable Shares *Irredeemable Shares *Equity or ordinary shares *Shares at premium *Shares at discount *Bonus shares

SOURCES OF RAISING CAPITAL OWNED FUNDS BORROWED FUNDS

ALLOTMENT OF SECURITIES BY COMPANY As per section 42(6) of Companies Act, 2013, if Company has received any amount received for the purpose of allotment of shares on Private placement basis then shares must be allotted within 60 days of receiving share application money otherwise Company shall refund the whole application money within 15 days from the completion of 60 days. If it fails to repay within the above prescribed period, it shall be liable to repay the amount with interest at the rate of 12% p.a. from the expiry of sixtieth day. Money received under this section shall be kept in a separate bank account, i.e., Escrow Account.

STATUTORY REQUIREMENTS OF APPOINTMENT OF A COMPANY SECRETARY Every listed company and every other company having paid-up share capital of Rs. 5 Cr or more to appoint the Company Secretary in whole-time employment. Company Secretary is a Statutory Post under the Companies Act, 2013. He has to report to the Board about the compliance of the provisions, rules and other laws applicable to the company. He has to make sure that company complies with the secretarial standards and other relevant law and rules.

THANK YOU  CS Dhanraj Singh Thakur FCS, M. Com. (P), L.L.B. Designated Partner Athena Business Advisors (India) LLP 147, II Floor, Zone-2, M.P. Nagar, Bhopal-11 +91-9074660044