WHAT IS A SMALL COMPANY

The Companies Act of 2013 established the idea of a "Small Company" for the first time in India. Providing various exemptions, privileges, and liberation with a lower compliance burden on the businesses that are smaller in size and activity is a new step in the de-regulation of entities. By raising the thresholds for paid up... Continue Reading →

AUDIT OF COMPANY LIQUIDATION ACCOUNTS

The audit of the accounts of a firm is not compulsory, whereas the audit of accounts of a company is mandatory. APPOINTMENT OF AUDITORS The Companies Act, 2013 (the “Act”), has laid down specific and onerous obligations on the company and its auditors with stringent penalties, including imprisonment for non-compliance with the relevant provisions for... Continue Reading →

FUNCTION OF COMPANY SECREYARY

INTRODUCTION The existing Companies Act, 1956 (the Act) in India (as also the Companies Act, 1985 in England) do not list out the functions of the secretary, there have been attempts over the last decade or so to include the same in the Act. The Companies (Amendment) Bill, 2003 and the Concept Paper on Company... Continue Reading →

PROCEDURE TO CONVERT A COMPANY

ACCORDING TO SEC 8 OF COMPANY ACT----- Companies that are registered under Section 8 of the Companies Act, 2013 are those companies that pertain to Non-Government or Non-Profit Organizations. Such Section 8 companies are formed with an objective to promote the fields of trade, commerce, art, science, sports, education, research, religion, social welfare, environment protection... Continue Reading →

ROLE OF MANAGING DIRECTOR

The managing director of a company is in charge of the organization’s daily operations and is under the purview of the CEO (Chief Executive Officer), the executive head of a company. He or she is also expected to keep a company solvent and facilitate its expansion and growth. In other words, the managing director is... Continue Reading →

APPLICATION TO TRIBUNAL FOR RELIEF IN CASE OF OPPRESSION

INTRODUCTION Sec 241 deal with application to tribunal for relief in case of oppression, ETC. The terms oppression and mismanagement are not defined under the Companies Act, 2013. These terms are to be interpreted by the court depending upon the facts of each case. Mismanagement refers to practices of managing the company incompetently and dishonestly.... Continue Reading →

Compensation For Loss of Office of Managing or Whole Time Director or Manager

Section 202: Compensation for loss of office of managing or whole-time director or manager. As per the provisions of Section 202 of Companies Act 2013, compensation for loss of office/consideration for retirement from office may be paid to MD/WTD or manager subject to specified limits and except in the specified cases. (1) A company may... Continue Reading →

Who is Expert under Companies Act

Section 2 (38) "Exper" of Companies Act, 2013: Engineers, valuers, chartered accountants, company secretaries, cost accountants, and anybody else with the capacity to give a certificate in accordance with a current legislation are all considered "experts." If a person possesses in-depth knowledge in a certain subject or special abilities that are essential to a group's... Continue Reading →

   Power of Limited Companies to Alter Its Share Capital

Section 61 Limited companies' ability to change their share capital  (1) A limited company with a share capital may change its memorandum in its general meeting to—if permitted by its articles. (a) Raise the amount of its authorized share capital that it deems necessary; (b) Combine and divide all or a portion of its share... Continue Reading →

   Different Types of Share Capital

An equity share, occasionally appertained to as an ordinary share, is a form of fractional power that entails the topmost quantum of entrepreneurial responsibility for a trading organization. Let's examine equity shares in lesser detail. The company keeps its equity share investment capital. It's only returned after the business has been shut down. The company's... Continue Reading →

Official liquidator to make payment into public account of India

Chapter xx (sec270 – 365) of the Companies Act, 2013 (CA 2013) deals with the provisions related to winding up. Section 349 of CA 2013 provides for official Liquidator to make payments into public account of India. As per the section of 349 of company law in which it was given that “EVERY OFFICIAL LIQUIDATOR... Continue Reading →

REPAYMENT OF DEPOSITE ETC. ACCEPTED BEFORE COMMENCEMENT OF THE ACT

Section 74. Repayment of deposits, etc., accepted before commencement of this Act. Chapter V (SEC 73-76A) of the Companies Act, 2013 deals with the provisions related to acceptance of deposits by companies. Section 74 of CA 2013 provides for repayment of deposits, etc., accepted before commencement of this Act. Applicability of the provision (1) Where... Continue Reading →

WHAT IS A PUBLIC COMPANY?

INTRODUCTION As per Section 2(71) of the Companies Act, 2013 “Public company” means a company which is not a private company and has a minimum paid-up share 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 a public... Continue Reading →

Fast Track Mergers in India

“We get talent and scale from mergers”-Angela Braly Introduction: Fast Track Merger (FTM) is defined by Section 233 of the Companies Act of 2013, as well as Rule 25 of the Companies (Compromises, Arrangements, and Amalgamations) Rules of 2016. FTM is a new idea that has been established in India to make doing business easier.... Continue Reading →

Ponzi Schemes

Introduction A Ponzi scheme is a fraudulent investment designed to defraud investors. It entails enticing the general public to invest in dubious yet lucrative schemes. With almost little real income, they rely on a steady stream of new money to stay afloat. The scheme collapses when there are no new investors or when existing investors... Continue Reading →

College as State

Can a government college be recognised as the State under the Companies Act? This is a main contention that was raised, especially in cases of discriminatory practices that are alleged to have happened in these colleges. In such cases can the college be tried under Article 14? These are a few questions that arise when... Continue Reading →

Liability of Promoter

The role of promoters in setting up a company cannot be denied. Like the famous Spiderman quote with great power comes great responsibility, the role of a promoter holds a lot of accountability. Due to the separate personality of a company, promoters may tend to misuse this in order to gain silent profits or exploit... Continue Reading →

FOSS v/s HARBOTTLE

TITLE OF THE CASE: Foss v Harbottle CITATION: [1843] 67 ER 189, (1843) 2 Hare 461 COURT: Court of Chancery BENCH: Wigram VC, Jenkins LJ PETITIONER: Richard Foss and Edward Starkie Turton DEFENDANTS: Thomas Harbottle & Other’s INTRODUCTION: The case of FOSS v HARBOTTLE is a key precedent in English corporate law. According to the... Continue Reading →

WINDING UP OF COMPANY

INTRODUCTION TO WINDING UP OF A COMPANY In case of winding up and dissolution, along with the Companies Act, 2013, the Insolvency & Bankruptcy Code, 2016 is also applicable to provide time bound resolution and eliminate the longer procedures along with protection of interest of creditors from insolvent company initiating for winding up procedures. One... Continue Reading →

The probable ways by which a company can raise capital along with its hindrances

The probable ways are: LOANS- These are the short- term loans that a company acquires in order to raise capital and it is acquired via keeping the assets of the company as security but the creditors do not become the co-owners of the company. Hindrances- That they tend to increase the debt of the company... Continue Reading →

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