APPLICABILTY: - Applicable on Listed companies.
Compliances
a). Regular Monthly Compliances
S.N.
Sections/ Rules/ Clauses
Requirement under the Act
To whom to be submitted
Regulatory Body
Compliance Due Date
Consequence for non compliance
Source Document
APRIL
1.
Clause 49(VI)(ii)
Submit Quarterly Corporate Governance Compliance Certificate (Qtr from Jan-March)
Stock Exchanges
Stock Exchanges
15th April
2.
Clause 35
Submit Shareholding Pattern as at the end of the previous quarter (Qtr from Jan-March)
Stock Exchanges
Stock Exchanges
21st April
Suspension of trading of scrips after issue of show cause notice.
Stock Exchange Website
3.
Clause 41
Intimate date of Board Meeting to consider quarterly results. (Qtr from Jan-March)
Stock Exchanges and to Directors of the Company
Stock Exchanges
Prior intimation of date and purpose at least 7 clear days (excluding date of intimation and date of meeting) (i.e. latest by 21st April )
-
4.
Clause 41
Issue of press release about Board Meeting to consider quarterly results (Qtr from Jan-March)
One national newspaper and one regional newspaper
Stock Exchange
7 clear days in advance (i.e. latest by 23rd April )
-
5.
Clause 41
Hold Board Meeting for taking on record un audited quarterly results (Qtr from Jan-March)
Stock Exchanges
Stock Exchanges
On or before 30th April
6.
Clause 41
Furnish Unaudited quarterly financial results in the prescribed format (Qtr from Jan-March)
Stock Exchanges
Stock Exchanges
Fax within 15 minutes of closure of Board Meeting in which the results are placed.
Original copy will be sent through courier which should be received by the exchange on or before 30th April.
Suspension of trading of scrips after issue of show cause notice.
7.
Submission of audited results for last quarter
(Jan-March) by 30th June Written intimation to SE within 1 month about exercise of this option.
Stock Exchanges
Stock Exchanges
Submit audited financial results for the entire F/Y within 3 months of the end of F/Y plus
Written intimation to SE within 1 month about exercise of this option.
8.
Clause 41
Publish Quarterly Results along with segment wise revenue, results and capital employed, if applicable. [as per format prescribed]
(Qtr from Jan-March)
One English newspaper and one regional newspaper
Stock Exchange
Within 48 hours of the conclusion of the Board Meeting (i.e. latest by 2nd may) In case of audited annual financial results, it shall also publish the qualification / reservations, if any, expressed by the auditor together with the audited results.
-
9.
Clause 31 (e)
Submission of a copy of press release about the board meeting to consider quarterly results and quarterly results published in the newspaper
Stock Exchange
Stock Exchange
Promptly on publishing quarterly results in newspapers
10.
Clause 47(c)
Submission of half yearly Compliance Certificate from practicing Company Secretaries (for half year ended on march)
Stock Exchanges
Stock Exchanges
Within 24 hours of receipt of certificate by the Company (i.e. latest by 1st May) and the certificate is to be obtained on or before 31st April
11.
Clause 51
Submit shareholding Pattern, Annual Corporate Governance Report, Quarterly Results, Half yearly financial Statements, statement of action taken against the Company by any regulatory agency and full version of annual report.
SEBI EDIFAR website
Stock Exchanges
Within such time as specified by SEBI
12.
Clause 38
Payment of Annual Listing Fees
Stock Exchanges
Stock Exchanges
30th April
Suspension of trading of scrips after issue of show cause notice.
13.
Clause 41
Submission of audited results for last quarter
(Jan-March)
Stock Exchanges
Stock Exchanges
Submit audited financial results for the entire F/Y within 3 months of the end of F/Y plus
Written intimation to SE within 1 month about exercise of this option.
14.
Clause 41
if the Company opts to publish audited results before 30th June, Intimation to the exchange shall be given regarding the same
Stock Exchanges
Stock Exchanges
30th April
MAY
15.
Clause 41
Submit limited review report for the quarter ended 31st March
Stock Exchanges
Stock Exchange
31st May
JUNE
16.
Clause 41
Intimation of date of Board Meeting for taking on record the audited annual financial results
(if the Company opts to publish audited results before 30th June)
Stock Exchanges
Stock Exchanges
7 clear days in advance (i.e. latest by 21st June)
17.
Clause 41
Issue of press release about Board Meeting to take on record the audited annual financial results
(If the Company opts to publish audited results before 30th June)
One national newspaper and one regional newspaper
Stock Exchanges
7 days in advance (i.e. latest by 23rd June)
18.
Clause 41
Hold Board Meeting for taking on record Audited Annual financial results
Stock Exchanges
Stock Exchanges
On or before 30th June
(Board meeting should be conducted in such a way so that results can be published on or before 30th June)
19.
Clause 41
Submission of audited results for last quarter
(Jan-March) by 30th June Written intimation to SE within 1 month about exercise of this option.
Stock Exchanges
Stock Exchanges
Submit audited financial results for the entire F/Y within 3 months of the end of F/Y plus i.e. by 30th June
Written intimation to SE within 1 month about exercise of this option.
20.
Clause 31 (e)
Submission of a copy of press release about the board meeting to consider quarterly results and quarterly results published in the newspaper
Stock Exchanges
Stock Exchanges
Promptly on publishing the annual results in newspapers
21.
Clause 51
Submission of Audited Annual Results
SEBI EDIFAR website
Stock Exchanges
Within such time as specified by SEBI
JULY
22.
Clause 49(VI)(ii)
Submit Quarterly Corporate Governance Compliance Certificate
Stock Exchanges
Stock Exchanges
15th July
23.
Clause 35
Submission of Shareholding Pattern as at the end of the previous quarter
Stock Exchanges
Stock Exchanges
21st July
24.
Clause 41
Intimation of date of Board Meeting for taking on record the quarterly results (Qtr from apr-june)
Stock Exchanges
Stock Exchanges
7 clear days in advance (i.e. latest by 24th July )
25.
Clause 41
Issue of notice in Newspaper about Board Meeting to take on record quarterly results (Qtr from apr-june)
One national newspaper and one regional newspaper
Stock Exchanges
7 days in advance (i.e. latest by 24th July )
26.
Clause 41
Hold Board Meeting for taking on record unaudited quarterly results (Qtr from apr-june)
Stock Exchanges
Stock Exchanges
On or before 31st July
27.
Clause 41
Furnish Unaudited quarterly financial results (Qtr from april-june) in the prescribed format. And Limited Review Report by 31st August
Stock Exchanges
Stock Exchanges
Fax within 15 minutes of closure of Board Meeting in which the results are placed.
Original copy will be sent through courier which should be received by the exchange on or before 31st July.
28.
Clause 41
Submission of audited quarterly results Within 1 month of end of each quarter along with audit report
Stock Exchanges
Stock Exchanges
On or before 31st July
29.
Clause 41
Publish Quarterly Results along with segment wise revenue, results and capital employed, if applicable. [as per format prescribed]
One English newspaper and one regional newspaper
Stock Exchange
Within 48 hours of the conclusion of the Board Meeting (i.e. latest by 2nd August)
-
30.
Clause 31 (e)
Submission of a copy of press release about the board meeting to consider quarterly results and quarterly results published in the newspaper
Stock Exchanges
Stock Exchanges
Promptly on publishing quarterly results in newspapers
31.
Clause 51
Submission of Shareholding Pattern, Corporate Governance Compliance Report and Quarterly Results and Statement of action taken against the company by any regulatory agency
SEBI EDIFAR website
Stock Exchanges
Within such time as specified by SEBI
AUGUST
32.
Clause 41
Submit limited review report for the quarter ended 30th June
Stock Exchanges
Stock Exchanges
31st August
SEPTEMBER
33.
Clause 16
Notice in advance of BOOK CLOSURE
* In case of such securities which are announced by SEBI from time to time for compulsory delivery in dematerialized form by all investors
*books shall be closed at least once a year (at the time of AGM if not closed otherwise)
Stock Exchanges
Stock Exchanges
At least 21 days/15 days before the commencement of book closure*
34.
Clause 31 (e)
NOTICE OF AGM
Six copies of the notice of the AGM is to be submitted as soon as they are issued to the shareholders if the said notice is accompanied by Annual report i.e. 25 days before the AGM.
Stock Exchanges
Stock Exchanges
At least 25 clear days notice to shareholder is mandatory e.g. latest by 5th September
35.
Convene Annual general meeting
On or before 30th September
36.
Clause 31 (d)
Send Copy of the proceedings at Annual General Meeting of the Company.
Stock Exchanges
Stock Exchanges
Promptly
OCTOBER
37.
Clause 49(VI)(ii)
Submit Quarterly Corporate Governance Compliance Certificate
Stock Exchanges
Stock Exchanges
15th October
38.
Clause 35
Submission of Shareholding Pattern as at the end of the previous quarter
Stock Exchanges
Stock Exchanges
21st October
Suspension of trading of scrips after issue of show cause notice.
39.
Clause 41
Intimation of date of Board Meeting for taking on record the quarterly results (Qtr from july-sept)
Stock Exchanges
Stock Exchanges
7 days in advance (i.e. latest by 24th October )
40.
Clause 41
Issue of press release about Board Meeting to take on record quarterly results (Qtr from july-sept)
One national newspaper and one regional newspaper
Stock Exchanges
7 days in advance (i.e. latest by 24th October )
41.
Clause 41
Hold Board Meeting for taking on record un audited quarterly results (Qtr from july-sept)
Stock Exchanges
Stock Exchanges
On or before 31st October
42.
Clause 41
Furnish Unaudited quarterly financial results in the prescribed format (Qtr from july-sept) And Limited Review Report by 31st November.
Stock Exchanges
Stock Exchanges
Fax within 15 minutes of closure of Board Meeting in which the results are placed.
Original copy will be sent through courier which should be received by the exchange on or before 31st October.
Suspension of trading of scrips after issue of show cause notice.
43.
Clause 41
Submission of audited quarterly results Within 1 month of end of each quarter along with audit report
Stock Exchanges
Stock Exchanges
On or before 31st October
44.
Clause 41
Publish Quarterly Results along with segment wise revenue, results and capital employed, if applicable. [as per format prescribed]
One English newspaper and one regional newspaper
Stock Exchange
Within 48 hours of the conclusion of the Board Meeting
-
45.
Clause 31 (e)
Submission of a copy of press release about the board meeting to consider quarterly results and quarterly results published in the newspaper
Stock Exchanges
Stock Exchanges
Promptly on publishing quarterly results in newspapers
46.
Clause 47(c)
Submission of half yearly Compliance Certificate from the Company Secretary
Stock Exchanges
Stock Exchanges
Within 24 hours of receipt of certificate by the Company (i.e. latest by 1st November) and the certificate is to be obtained on or before 31st October
47.
Clause 51
Submit shareholding Pattern, Annual Corporate Governance Report, Quarterly Results, Half yearly financial Statements, statement of action taken against the Company by any regulatory agency and full version of annual report.
SEBI EDIFAR website
Stock Exchanges
Within such time as specified by SEBI
NOVEMBER
48.
Clause 41
Submission of audited Half Yearly Results (for the half year ended on 30th September) if the Limited Audit Review and unaudited results of second quarter are not desired to be sent.
Stock Exchange
Stock Exchange
30th November
49.
Clause 41
Submit limited review report for the quarter ended 30th September
Stock Exchange
Stock Exchange
30th November
DECEMBER
JANUARY
50.
Clause 49(VI)(ii)
Submit Quarterly Corporate Governance Compliance Certificate
Stock Exchanges
Stock Exchanges
15th January
51.
Clause 35
Submit Shareholding Pattern as at the end of the previous quarter
Stock Exchanges
Stock Exchanges
21st January
Suspension of trading of scrips after issue of show cause notice.
52.
Clause 41
Intimate date of Board Meeting to consider quarterly results (Qtr from oct-december)
Stock Exchanges
Stock Exchanges
7 days in advance (i.e. latest by 24th January )
53.
Clause 41
Issue of press release about Board Meeting to consider quarterly results (Qtr from oct-december)
One national newspaper and one regional newspaper
Stock Exchange
7 days in advance (i.e. latest by 24th January )
54.
Clause 41
Hold Board Meeting for taking on record unaudited quarterly results
Stock Exchanges
Stock Exchanges
On or before 31st January
55.
Clause 41
Furnish Unaudited quarterly financial results in the prescribed format (Qtr from oct-december) And Limited Review Report by 31st February.
Stock Exchanges
Stock Exchanges
Fax within 15 minutes of closure of Board Meeting in which the results are placed.
Original copy will be sent through courier which should be received by the exchange on or before 30th January.
Suspension of trading of scrips after issue of show cause notice.
56.
Clause 41
Submission of audited quarterly results Within 1 month of end of each quarter along with audit report
Stock Exchanges
Stock Exchanges
On or before 31st January
57.
Clause 41
Publish Quarterly Results along with segment wise revenue, results and capital employed as per format prescribed.
One English newspaper and one regional newspaper
Stock Exchange
Within 48 hours of the conclusion of the Board Meeting (i.e. latest by 2nd Feb)
-
58.
Clause 31 (e)
Submission of a copy of press release about the board meeting to consider quarterly results and quarterly results published in the newspaper
Stock Exchange
Stock Exchange
Promptly on publishing quarterly results in newspapers
59.
Clause 51
Submit Shareholding Pattern, Annual Corporate Governance Report, Quarterly Results, and Statement of action taken against the company by any regulatory agency.
SEBI EDIFAR website
Stock Exchanges
Within such time as specified by SEBI
FEBRUARY
60.
Clause 41
Submit limited review report for the quarter ended 31st December
Stock Exchanges
Stock Exchanges
28th February
MARCH
There are certain provisions under Clause-41 for Companies having subsidiaries
b). Event based Compliances
S.N.
Sections/ Rules/ Clauses
Requirement under the Act
To whom to
Be submitted/ intimated
Regulatory Body
Compliance Due Date
Consequence for non compliance
Source Document
EVENT – ALLOTMENT OF SHARES / REJECTION
1.
Clause 1
Letters of Allotment/Regret & Letters of Right to be issued
Allottees
Stock Exchanges
Simultaneously
EVENT – RENUNCIATION
2.
Clause 3(b)
(b) Issue certificates or Pucca Receipts after expiration of any Right to Renunciation
Stock Exchanges
Within one month
EVENT - TRANSFER, SUB-DIVISION, CONSOLIDATION, RENEWAL, EXCHANGE OR ENDORSEMENT OF CALLS/ALLOTMENT MONIES
3.
Clause 3 (c) (i)
Issue certificates lodged for transfer, subdivision, consolidation, renewal, exchange or endorsement of calls/allotment monies
Shareholders
Stock Exchanges
Within one month
4.
Clause 3 (c) (ii)
Issue, in respect of such lodgment for transfer, Pucca Transfer Receipts in denominations corresponding to the market units of trading
Shareholders
Stock Exchanges
Within fifteen days
5.
Clause 3 (e)
Issue new certificates in replacement of those which are lost after receiving notification of loss and receipt of proper indemnity and also verify the signatures of the shareholders and intimate transferor in case of minor differences in the transfer documents
Shareholders
Stock Exchanges
Within six weeks
6.
Clause 13
The Company will notify the Exchange of any attachment or prohibitory orders restraining the Company from transferring securities out of the names of the registered holders and furnish to the Exchange particulars of the number of securities so affected, the distinctive numbers of such securities and the names of the registered holders thereof.
Stock Exchanges
Stock Exchanges
Promptly
EVENT – BUY BACK
7.
Clause 19 (a)
Intimate date of Board Meeting at which proposal for buy back of securities is due to be considered.
Stock Exchanges
Stock Exchanges
Atleast 7 days in
Advance
8.
Clause 20
Intimate to the Exchange about the decision of buy back of securities on the closure of the Board Meeting held to consider the same.
Stock Exchanges
Stock Exchanges
Within 15 minutes
EVENT – RIGHT ISSUE
9.
Clause 19 (a)
Intimate date of Board Meeting at which proposal for Rights is due to be considered.
Stock Exchanges
Stock Exchanges
Atleast 7 days in
Advance
EVENT – ISSUE OF CONVERTIBLE DEBENTURES
10.
Clause 19 (a)
Intimate date of Board Meeting at which proposal for Issue of convertible debentures or of debentures carrying a right to subscribe to equity shares is due to be considered.
Stock Exchanges
Stock Exchanges
Atleast 7 days in
Advance
EVENT – BONUS ISSUE
11.
Clause 19 (b)
Intimate date of Board Meeting at which Proposal for declaration of bonus is due to be considered in case it is communicated to the board of directors as part of agenda.
Stock Exchanges
Stock Exchanges
Simultaneously
EVENT – DECLARATION OF DIVIDEND AND AGM COMPLIANCES
12.
Clause 19 (a)
Intimation of board meeting
Give prior intimation to the Exchange about the Board Meeting at which proposal for Declaration/recommendation of Dividend is due to be considered
Stock Exchanges
Stock Exchanges
Atleast 7 days in
Advance
13.
Hold board meeting to decide date, time, place and agenda for AGM and Recommend/declare all dividend
* Dividend shall be recommended/ declared at least 5 days before Book closure.
N A
Stock Exchanges
14.
Clause 20
Decision of board meeting
Intimate to the Exchange of the closure of the Board Meeting held to consider or decide the same by Letter/fax/Telegram
a. All dividends and/or cash bonuses recommended or declared or the decision to pass any dividend or interest payment;
b. The total turnover, gross profit/loss, provision for depreciation, tax provisions and net profits for the year (with comparison with the previous year) and the amounts appropriated from reserves, capital profits, accumulated profits of past years or other special source to provide wholly or partly for the dividend, even if this calls for qualification that such information is provisional or subject to audit.
Stock Exchanges
Stock Exchanges
Within 15 minutes
15.
Clause 16
Notice in advance of BOOK CLOSURE
* In case of such securities which are announced by SEBI from time to time for compulsory delivery in dematerialized form by all investors
-> Books shall be closed Atleast once in a year (at the time of AGM if not closed otherwise)
->Minimum time gap between the two book closures and/or record dates should be at least 30 days
Stock Exchanges
Stock Exchanges
At least 21 days/15 days*
16.
NOTICE OF AGM
Six copies of the notice of the AGM is to be submitted as soon as they are issued to the shareholders i.e. 25 days before the AGM, if the said notice is accompanied by Annual report
Stock Exchanges
Stock Exchanges
At least 21 clear days notice to shareholders is mandatory i.e. latest by 5th September
17.
Clause 16
Closure of transfer books
Stock Exchanges
Stock Exchanges
Atleast once in a year (at the time of AGM if not closed otherwise)
18.
Convene Annual general meeting
N A
Stock Exchanges
On or before 30th September
19.
Clause 31 (d)
Send Copy of the proceedings at Annual General Meeting of the Company.
Stock Exchanges
Stock Exchanges
Promptly
20.
Clause 21
Date of payment of Dividend
The Company will fix and notify the Exchange of the date on and from which the
>Dividend on shares,
>Interest on debentures and bonds, and
>Redemption amount of redeemable shares or of debentures and bonds will be payable
Stock exchange
Stock Exchanges
At least twenty-one days in advance
EVENT – INCREASE IN CAPITAL
21.
Clause 22
The Company will, immediately on the date of the meeting of its Board of Directors held to consider or decide the same, intimate to the Exchange by Letter/fax/telegram short particulars of any increase of capital
Stock exchange
Stock Exchanges
Within 15 minutes of the closure of the Board Meetings
EVENT – DECISION IN THE BOARD MEETING
22.
Clause 22
The Company will, immediately on the date of the meeting of its Board of Directors held to consider or decide the same, intimate to the Exchange by Letter/fax/telegram
(a) Short particulars of any increase of capital
(b) Short particulars of the reissue of forfeited shares or securities, or the issue of shares or securities held in reserve for future issue or the creation in any form or manner of new shares or securities or any other rights, privileges or benefits to subscribe to;
(c) Short particulars of any other alterations of capital, including calls;
(d) Any other information necessary to enable the holders of the listed securities of the Company to appraise its position and to avoid the establishment of a false market in such listed securities
Stock exchange
Stock Exchanges
Within 15 minutes of the closure of the Board Meetings
EVENT – TIME TO BE GIVEN TO SHAREHOLDERS TO RECORD THEIR INTEREST
23.
Clause 23 (e)
to give to the shareholders reasonable time, within which to record their interest and exercise their rights
Shareholders
Stock Exchanges
Not being less than four weeks
EVENT – ISSUE OF LETTER OF ALLOTMENT
24.
Clause 23 (f)
To issue Letters of Allotment or Letters of Right for the purpose of making a bonus or rights issue and to issue Allotment Letters or certificates within six weeks of the last date fixed by the Company for submission of letters of Renunciation or applications of new securities
Shareholders
Stock Exchanges
Within six weeks of the record date or date of reopening of the Transfer Books after their closure
EVENT – IN PRINCIPLE APPROVAL
25.
Clause 24 (a)
The company agrees to obtain ‘in-principle’ approval for listing from the exchanges having nationwide trading terminals where it is listed, in respect of issue of further shares/securities
Stock exchange
Stock Exchanges
Before issuing further shares or securities.
EVENT – ISSUE OF PROSPECTUS
26.
Clause 24 (c)
Submit Prospectus and obtain Acknowledgment Card from SEBI
SEBI
SEBI
Before issue of prospectus
EVENT – LISTING OF SHARES
27.
Clause 24 (d)
Submit following for listing of shares: -
1. The Acknowledgment Card or letter indicating the observations on draft prospectus / letter of offer / offer documents by SEBI
2. Certificate from Merchant Banker acting as a lead manager to the issue reporting positive compliance by the company of the Guidelines on Disclosure and Investor Protection issued by SEBI.
Stock exchange
Stock exchange
At the time of applying for listing.
Securities shall not be eligible for listing and company shall be liable to refund the subscription monies to the respective investors immediately.
EVENT – SCHEME OF ARRANGEMENT / AMALGAMATION
28.
Clause 24 (f)
The company shall file any scheme/petition proposed to be filed before any Court or Tribunal under sections 391,394 and 101 of the Companies Act, 1956, With the stock exchange, for approval.
Stock Exchanges
Stock Exchanges
At least a month before it is presented to the Court or Tribunal.
EVENT – IF THE COMPANY IS GRANTING OPTION TO PURCHASE ANY SHARES
29.
Clause 25
While granting any options to purchase any shares of the Company, the Company will notify the Exchange - - -
(a) of the number of shares covered by such options, of the terms thereof and of the time within which they may be exercised;
(b) of any subsequent changes or cancellation or exercise of such options
Stock Exchanges
Stock Exchanges
Promptly
EVENT - REDEMPTION, CANCELLATION OR RETIREMENT OF ANY SECURITY
30.
Clause 27
The Company will notify the Exchange - - -
(a) of any action which will result in the redemption, cancellation or retirement in whole or in part of any securities listed on the Exchange;
(b) of the intention to make a drawing of such securities, intimating at the same time the date of the drawing and the period of the closing of the Transfer Books (or the date of striking of the balance) for the drawing;
(c) of the amount of security outstanding after any drawing has been made.
Stock Exchanges
Stock Exchanges
Promptly
EVENT - ANY CHANGE IN THE FORM OR NATURE OF ANY OF ITS SECURITIES
31.
Clause 28
The Company will not make any change in the form or nature of any of its securities that are listed on the Exchange or in the rights or privileges of the holders thereof without giving prior notice to the Exchange of the proposed change and making an application for listing of the securities as changed if the Exchange shall so require.
Stock Exchanges
Stock Exchanges
At least twenty one days' prior notice
EVENT - CHANGE IN THE GENERAL CHARACTER OR NATURE OF ITS BUSINESS
Clause 29
Notify any proposed change in the general character or nature of its business.
Stock Exchanges
Stock Exchanges
Promptly
EVENT - CHANGE IN DIRECTORATE MANAGING DIRECTOR, SECRETARIES, AUDITORS
32.
Clause 30
Notify any change in the Company’s directorate Managing Director, Secretaries, Auditors
Stock Exchanges
Stock Exchanges
Promptly
EVENT - STATUTORY AUDITORS’ AND DIRECTORS' ANNUAL REPORTS, BALANCE SHEETS AND PROFIT AND LOSS ACCOUNTS
33.
Clause 31 (a)
Forward to the Exchange ---Six copies of the Statutory Auditors’ and Directors' Annual Reports, Balance Sheets and Profit and Loss Accounts and of all periodical and special reports as soon as they are issued and one copy each to all the recognized stock exchanges in India
Stock Exchanges
Stock Exchanges
Promptly
EVENT - NOTICES, RESOLUTIONS AND CIRCULARS RELATING TO NEW ISSUE OF CAPITAL
34.
Clause 31 (b)
Forward to the Exchange ---Six copies of all notices, resolutions and circulars relating to new issue of capital
Stock Exchanges
Stock Exchanges
Prior to their dispatch to the shareholders
EVENT – MEETINGS CONVENED UNDER SEC 391 OR SEC 394 [MERGER, AMALGAMATION]
35.
Clause 31 (c)
Three copies of all the notices, call letters or any other circulars including notices of meetings convened u/s 391 or Section 394 read with section 391 of the Companies Act, 1956 together with Annexure thereto
Stock Exchanges
Stock Exchanges
At the same time as they are sent to the shareholders debenture holders or creditors or advertised in the Press
EVENT - PROCEEDINGS AT GENERAL MEETINGS
36.
Clause 31 (d)
Copy of the proceedings at all Annual and Extraordinary General Meetings of the Company;
Stock Exchanges
Stock Exchanges
Promptly
EVENT – PRESS RELEASE
37.
Clause 31 (e)
Three copies of all notices, circulars, etc., issued or advertised in the press either by the Company, or by any company which the Company proposes to absorb or with which the Company proposes to merge or amalgamate, or under orders of the court or any other statutory authority in connection with any merger, amalgamation, re-construction, reduction of capital, scheme or arrangement, including notices, circulars, etc. issued or advertised in the press in regard to meetings of shareholders or debenture holders or creditors or any class of them and copies of the proceedings at all such meetings.
Stock Exchanges
Stock Exchanges
Promptly
EVENT - Balance Sheet, Profit & Loss Account, Cash Flow Statement and Directors’ report
38.
Clause 32
The company will supply single copy of complete and full Balance Sheet, Profit & Loss Account, Cash Flow Statement and Directors’ report to shareholders
Shareholders
Stock Exchanges
No time limit
EVENT – NAME CHANGE
39.
Clause 32
In case the company has changed its name suggesting any new line of business then the company will disclose the turnover and income, etc., from such new activities separately
N.A
Stock Exchanges
Disclose in the annual results for a period of 3 years
40.
Clause 32
Disclose new name with old name on SEBI EDIFAR website.
SEBI EDIFAR website
Stock Exchanges
For a continuous period of 1 year
EVENT – CONSOLIDATED FINANCIAL STATEMENTS
41.
Clause 32
Publish Consolidated Financial Statements etc. in addition to the individual financial statements also get them audited and forward to the Exchange
Stock Exchanges
Publish in its Annual Report
EVENT - AMENDMENTS TO MEMORANDUM AND ARTICLES
42.
Clause 33
Forward to the Exchange copies of all notices and six copies (one certified) of such amendments as sent to its shareholders with respect to amendments to its Memorandum and Articles as soon as the Company in general meeting shall have adopted them.
Stock Exchanges
Stock Exchanges
Immediately
EVENT – INTIMATION TO SE IN THE FOLLOWING EVENT
43.
Clause 36
Inform about events such as strikes, lock-outs, closure on account of power cuts, price sensitive information etc. both at the time of occurrence of the event and subsequently after the cessation of the event viz.,
(1) Change in the general character or nature of business
(2) Disruption of operations due to natural calamity
(3) Commencement of Commercial Production/Commercial Operations
(4) Developments with respect to pricing/realization arising out of change in the regulatory framework
(5) Litigation/dispute with a material impact
(6) Revision in Ratings
(7) Any other information including
i) Issue of any class of securities.
ii) Acquisition, merger, de-merger, amalgamation, restructuring, scheme of arrangement, spin off or setting divisions of the company, etc.
iii) Change in market lot of the company’s shares, sub-division of equity shares of company.
iv) Voluntary delisting by the company from the stock exchange(s).
v) Forfeiture of shares.
vi) Any action which will result alteration in the terms regarding
Redemption/cancellation/retirement in whole or in part of any securities issued by the company.
vii) Information regarding opening, closing of status of ADR, GDR, or any other class of securities to be issued abroad.
viii) Cancellation of dividend/rights/bonus, etc.
The above information should be made public immediately
Stock Exchanges
Stock Exchanges
Promptly
EVENT – SECURITY WITH THE EXCHANGE BEFORE ISSUE OF NEW SECURITIES
44.
Clause 42
For issuance of new securities, deposit with exchange an amount calculated at the rate of 1% of the amount of securities offered for subscription to the public/existing holders
Stock Exchanges
Stock Exchanges
Before the opening of subscription list
EVENT – STATEMENT SHOWING VARIATIONS BETWEEN PROJECTED UTILIZATION OF FUNDS
45.
Clause 43 (a)
The Company agrees that it will furnish on a quarterly basis a statement to the Exchange indicating the variations between projected utilization of funds and/or projected profitability statement made by it in its prospectus or letter of offer or object/s stated in the explanatory statement to the notice for the general meeting for considering preferential issue of securities, and the actual utilisation of funds and/or Actual profitability.
Stock exchange
Stock Exchanges
On a quarterly basis
46.
Clause 43 (b)
The statement referred to in clause (1) shall be given for each of the years for which projections are provided in the prospectus/letter of offer/object/s stated in the explanatory statement to the notice for considering preferential issue of securities and shall be published in newspapers simultaneously with the unaudited/audited financial results as required under clause 41.
Stock exchange
Stock Exchanges
On a quarterly basis
47.
Clause 43 (c)
If there are material variations between the projections and the actual utilisation/profitability, the company shall furnish an explanation therefore in the advertisement and shall also provide the same in the Directors' Report."
Stock exchange
Stock Exchanges
Annually
EVENT – allotment of Shares
48.
Clause 44
Allotment of securities offered to the public shall be made
Stock Exchanges
Within 30 days of the closure of the public issue
EVENT – Certificate from RTA
49.
Clause 47 (c)
That it will ensure that the RTA produces a certificate from a practicing Company Secretary, certifying that all certificates have been issued within one month of the date of lodgment for transfer, sub-division, consolidation, renewal, exchange or endorsement of calls/allotment monies and a copy of the same shall be made available to the Exchange
Stock Exchanges
Obtain - Within one month of the end of each half of the financial year
Furnish - Within 24 hours of the receipt of the certificate by the Company
EVENT - loss of share certificates and issue of the duplicate certificates
50.
Clause 47 (d)
To furnish to the Exchange both by way of floppy disks and printed details, regarding loss of share certificates and issue of the duplicate certificates
Stock Exchanges
Stock Exchanges
Within 48 hours of its getting information
EVENT - MEMORANDUM OF UNDERSTANDING ENTERED INTO WITH THE RTA
51.
Clause 47 (e)
To maintain copies of Memorandum of Understanding entered into with the RTA setting out their mutual responsibilities, at the Registered Office of the Company for Public inspection and the company further agrees to submit a copy of the same to the Exchange for its records.
N.A
Stock Exchanges
Within 48 hours
EVENT – e-mail id OF THE GRIEVANCE REDRESSAL DIVISION
52.
Clause 47 (f)
Designate an e-mail ID of the grievance redressal division/compliance officer exclusively for the purpose of registering complaints by investors and display email id on the company’s website.
Company’s website
Stock Exchanges
Regularly
EVENT – CORPORATE GOVERNANCE
53.
Clause 49
Composition of Board
1. At least 50 % of BOD shall be non-executive director.
2. Number of independent directors
- Where chairman is non-executive director – At least 1/3rd of BOD shall be independent directors.
- Where chairman is executive director – At least 1/2nd of BOD shall be independent directors.
N.A
Stock Exchanges
N.A
54.
Clause 49
The board meeting shall be held at least four times a year, with a maximum time gap of 4 months between any two meetings
N.A
Stock Exchanges
55.
Clause 49
Constitution of Audit Committee.
N.A
Stock Exchanges
56.
Composition of Audit Committee
1. Minimum 3 directors and 2/3rd of which shall be independent directors.
2. Chairman shall be independent director who shall be present at AGM of the company.
3. Company Secretary shall act as the secretary to the committee.
N.A
Stock Exchanges
57.
Clause 49
The audit committee shall meet at least thrice a year. One meeting shall be held before finalization of annual accounts and once every six months.
N.A
Stock Exchanges
58.
Clause 49
Quorum of Audit Committee meeting
Higher of the following: -
- 2 members or
- 1/3rd of the members and
2 independent members shall also be present.
N.A
Stock Exchanges
59.
Clause 49
Subsidiary companies
- At least 1 independent director of holding company shall be director of material non-listed Indian subsidiary company.
- The audit company of listed holding company shall review the financial statements of the unlisted subsidiary company.
- The minutes of the unlisted subsidiary company shall be placed at the board meeting of holding company.
N.A
Stock Exchanges
60.
Clause 49
Disclosures
Statements to be placed before audit committee
1. Statement of transactions with related party whether in ordinary course of business or not.
2. Statement of utilisation of proceeds of public issue on quarterly basis.
Disclosures in the Annual Report
1. A separate section on corporate Governance
2. Disclosure of different accounting treatment followed.
3. Statement of utilisation of proceeds of public issue (certified by statutory auditor) for purposes other than mentioned in offer document.
4. Remuneration of non-executive director.
5. Pecuniary transactions with non-executive director.
6. Number of shares of the company held by the non-executive director.
7. Management Discussion and Analysis report.
Quarterly results shall be put on company’s website.
Stock Exchanges
61.
Clause 49
CEO (Managing Director)/CFO (Whole time finance director) certification
Stock Exchanges
62.
Clause 49
Non-executive directors’ compensation except sitting fees and disclosures – prior shareholders approval is required.
N.A
Stock Exchanges
63.
Clause 49
The companies shall submit a quarterly compliance report to the stock exchanges
Stock Exchanges
Stock Exchanges
Within 15 days from the close of quarter
64.
Clause 49
Compliance certificate from auditors / Practicing Company Secretary for compliance with Corporate Governance. And annex the certificate with Director’s report.
Annex the certificate with Director’s report
Stock Exchanges
Procedure for conversion of public limited to private limited company
Draft Board Resolution
MINUTES OF THE MEETING OF ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….
DIRECTORS PRESENT:
ITEM-I
PROCEDURAL MATTERS:
Quorum being present
Chairman:
Confirmation of Minutes of the last Board Meeting:
ITEM-II
CONVERSION OF COMPANY INTO PRIVATE COMPANY:
The Chairman apprised the Board that after the incorporation of the company as a private company vide Certificate of Incorporation dated………………………, the Directors had the intention to get the company converted into a public limited company because the activities of the company have increased manifold and accordingly the status of the company was converted to limited company vide fresh certificate of incorporation…………………………….
The Chairman further apprised the members that the Company was originally incorporated with a view to undertake business as owners, builders, developers, promoters, proprietors, civil contractors other related activities thereto at a larger scale. However, in view of continued depressive capital/ financial market conditions the Company could hardly do any business in this line. Therefore, thought it prudent to abandon the said activities. Further, the Company being a closely held public company and the marginal shareholding being held by the family members and associate companies, the company find it difficult to comply with various provisions of public company, unnecessarily being applicable to the Company. In view of the above it was proposed that the Company be converted into private company.
The Board discussed the matters stated below and thereafter passed the resolution accordingly.
CONVERSION OF COMPANY INTO PRIVATE LIMITED COMPANY AND CONSEQUENTAL ALTERATIONS IN ARTICLES OF ASSOCIATION OF THE COMPANY.
“RESOLVED THAT pursuant to proviso to sub-section (1) of section 31 of the Companies Act, 1956, and subject to approval of the shareholders, the company be converted into a private company.
RESOLVED FURTHER THAT the Articles of Association of the Company as printed and submitted to the meeting and for the purpose of identification signed by the Chairman thereof be and same is hereby approved and adopted as the Articles of Association of the Company in substitution for and to the exclusion of all existing Articles thereof.”
CHANGE IN THE NAME OF THE COMPANY BY SUBSTITUTING THE WORD “LIMITED” WITH “PRIVATE LIMITED”:
“RESOLVED THAT pursuant to the proviso to section 21 of the Companies Act, 1956, and subject to approval of the shareholders, the name of the company be changed from………………………..TO………………and the name clause in the memorandum and articles of association of the company be also accordingly altered.”
ALTERATION IN THE MEMORANDUM OF THE COMPANY:
“RESOLVED THAT pursuant to section 16 of the Companies Act 1956, and subject to approval of the shareholders,Clause I of the memorandum of association of the company be altered by substituting the same with the following:
“Clause I. the name of the company is…………………………”
ITEM-III
CONVENING OF EXTRA ORDINARY GENERAL MEETING AND APPROVAL OF NOTICE THEREOF:
It was informed to the Board that in order to give effect to the proposal at Item No.,2 above the approval of the members would be required. The Board discussed and thereafter passed the following resolution:
“RESOLVED THAT an Extra Ordinary General Meeting of the Shareholders be convened and a draft notice as placed before the Board and duly initialed by the Chairman for the purpose of authentication be and is hereby approved.
RESOLVED FURTHER THAT Shri………………………, Director be and is hereby authorized to fix the date, time & venue of the said meeting and issue notice to the members and others entitled to receive the same.
RESOLVED FURTHER THAT Shri…………………….., Director of the Company be and is hereby authorised to make an application in Form-IB as prescribed in the Companies (Central Government’s) General Rules and Forms, 1956 along with the prescribed enclosures and the fee, to the concerned Registrar of Companies, for alteration of the articles of the company, for obtaining Central Government approval of the alteration of the Articles of the company.”
VOTE OF THANKS:
There being no other business to transact, the meeting ended with a vote of thanks to the chair.
DATE :
PLACE: CHAIRMAN
NOTICE IS HEREBY GIVEN THAT AN EXTRAORDINARY GENERAL
SPECIAL BUSINESS:
ITEM-1
CONVERSION OF COMPANY INTO PRIVATE LIMITED COMPANY AND CONSEQUENTAL ALTERATIONS IN ARTICLES OF ASSOCIATION OF THE COMPANY.
“RESOLVED THAT pursuant to proviso to sub-section (1) of section 31 of the Companies Act, 1956 and subject to approval of the shareholders, the company be converted into a private company.
RESOLVED FURTHER THAT the Articles of Association of the Company as printed and submitted to the meeting and for the purpose of identification signed by the Chairman thereof be and same is hereby approved and adopted as the Articles of Association of the Company in substitution for and to the exclusion of all existing Articles thereof.”
ITEM-II
CHANGE IN THE NAME OF THE COMPANY BY SUBSTITUTING THE WORD “LIMITED” WITH “PRIVATE LIMITED”:
“RESOLVED THAT pursuant to the proviso to section 21 of the Companies Act, 1956, and subject to approval of the shareholders, the name of the company be changed from …………………………….Limited and the name clause in the memorandum and articles of association of the company be also accordingly altered.”
ITEM-III
ALTERATION IN THE MEMORANDUM OF THE COMPANY:
“RESOLVED THAT pursuant to section 16 of the Companies Act, 1956, and subject to approval of the shareholders, Clause I of the memorandum of association of the company be altered by substituting the same with the following:
“Clause I. the name of the company is …………………………”
By order of the Board
(…………………..)
Director
NOTE:
1. A MEMBER IS ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE MEMBER OF THE COMPANY. THE PROXY FORMS, IN ORDER TO BE VALID MUST BE RECEIVED BY THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE MEETING. PROXY FORM IS ENCLOSED HEREWITH.
2. EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956 IS ATTACHED HERE WITH
EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956.
ITEM-I
The Company was originally incorporated with a view to undertake business as owners, builders, developers, promoters, proprietors, civil contractors other related activities thereto at a larger scale. However, in view of continued depressive capital/ financial market conditions the Company could hardly do any business in this line. Therefore, thought it prudent to abandon the said activities. Further, the Company being a closely held public company and the marginal shareholding being held by the family members and associate companies. The company find it difficult to comply with various provisions of public company, unnecessarily being applicable to the Company. In view of the above it was proposed that the Company be converted into private company.
The Board of the Directors of the Company, at its meeting held on…………………. resolved to convert the company into a private company.
Therefore, the proposed resolution for conversion of the Company into a private company.
A copy of the memorandum and articles of association of the company together with the proposed alteration is available for inspection at the registered office of the company during the business hours on any working day.
None of the directors is concerned or interested in the proposed resolution.
ITEM-II
The Board of Directors of the company had, at its meeting held on…………………resolved that consequent upon conversion of the company from Public limited to Private limited, the name of the Company be changed from…………………………. Limited.
Therefore, the proposed resolution for Change of the name of the company.
None of the directors is concerned or interested in the proposed resolution.
ITEM-III
The Board of Directors of the company had, at its meeting held on………………….. resolved that consequent upon conversion of the company from Public limited to Private limited, the Clause I of the memorandum of association of the company be substituted with “the name of the company is……………………..”.
Hence the proposed resolution is recommended for approval by the members.
None of the directors is concerned or interested in the proposed resolution.
MINUTES OF THE EXTRA ORDINARY GENERAL MEETING OF ===========================================================
1. CHAIRMAN :
2. QUORUM:
3. NOTICE OF THE MEETING:
4. CONVERSION OF COMPANY INTO PRIVATE COMPANY:
The Chairman apprised the members that the Company was originally incorporated with a view to undertake business as owners, builders, developers, promoters, proprietors, civil contractors other related activities thereto at a larger scale. However, in view of continued depressive capital/ financial market conditions the Company could hardly do any business in this line. Therefore, thought it prudent to abandon the said activities. Further, the Company being a closely held public company and the marginal shareholding being held by the family members and associate companies. The company find it difficult to comply with various provisions of public company, unnecessarily being applicable to the Company. In view of the above it was proposed that the Company be converted into private company.
The matter was discussed and thereafter following resolution was passed as:
1. SPECIAL RESOLUTION:
Proposed By : Shri
Seconded By : Shri
“RESOLVED THAT subject to the sanction of the Central Government, and pursuant to proviso to sub-section (1) of section 31 of the Companies Act, 1956, the company be converted into a private company.
RESOLVED FURTHER THAT the Articles of Association of the Company as printed and submitted to the meeting and for the purpose of identification signed by the Chairman thereof be and same is hereby approved and adopted as the Articles of Association of the Company in substitution for and to the exclusion of all existing Articles thereof.”
When being put to vote the motions were carried unanimously.
2. SPECIAL RESOLUTION:
Proposed By :
Seconded By :
“RESOLVED THAT subject to the sanction of the Central Government and pursuant to the proviso to section 21 of the Companies Act, 1956, the name of the company be changed from……………………..Limited and the name clause in the memorandum and articles of association of the company be also accordingly altered.”
When being put to vote the motions were carried unanimously.
3. SPECIAL RESOLUTION:
Proposed By :
Seconded By :
“RESOLVED THAT pursuant to section 16 of the Companies Act, 1956, Clause I of the memorandum of association of the company be altered by substituting the same with the following:
“Clause I. the name of the company is………………….. Limited”
When being put to vote the motions were carried unanimously.
5. VOTE OF THANKS:
There being no other business to transact, the meeting ended with a vote of thanks to the chair.
DATE :
PLACE : CHAIRMAN
LLP incorporation procedure
Step I Deciding the Partners and Designated Partners
A LLP can be incorporated with a minimum of atleast two partners who can be Individuals or Body Corporate through their nominees. Further for incorporating an LLP, of the total number no. of partners, atleast two shall be Designated Partners, of which atleast one must be an Indian Resident.
Parameters for deciding the Partners and Designated Partners:
Atleast Two Partners; Individuals or Body Corporate through individual nominees.
Minimum of Two Individuals as Designated Partners, of total no. of Partners.
Atleast One Designated Partner to be Resident Indian.
A person ‘Resident in India’ means a person who has stayed in India for a period of not less than one hundred and eighty two days during the immediately preceding one year. (Explanation to Section-7())
‘Designated Partner’ means a partner who is designated as such in the incorporation documents or who become a designated partner by and in accordance with the Limited Liability Partnership Agreement
Step II Obtaining DPIN No. & Digital Signature
Designated Partner Identification Number (DPIN): Section 7 (6) of LLP Act 2008, provides that every Designated Partner to obtain a DPIN from the Central Government.
DPIN is an eight digit numeric number allotted by the Central Government in order to identify a particular partner and can be obtained by making an online application in eForm 7 to Central Government and submitting the physical application along with necessary identity and Address proof of the person applying with prescribed fees.
Digital Signature Certificate: As all the documents and forms required for incorporating an LLP in India to be filed electronically and under the signatures of Designated Partners, thus atleast one Designated Partner to obtain the digital signature certificates from government recognized DSA’s. The signatures shall also be required for signing and filing of all relevant forms and documents to be filed, annually or event based after incorporation of the LLP, asking for approvals or as intimation.
Likewise the manual signatures, digital signature certificates are individual specific and no partner needs to obtain more than one.
Step III Checking the Name Availability
The next step is to decide the name for the proposed LLP to be incorporated, anyone intending to incorporate an LLP has to evaluate his proposed name under the prescribed parameters and make an application in Form 1of Rule 18(5) of the Limited Liability Partnership Act 2008, for reservation of the desired name.
The name of the limited liability partnership shall not be similar or identical with Company or LLP already registered in India and it should not contains words prohibited under the ‘Emblems and Names (Prevention of improper use) Act, 1950’or which are also not ‘Undesirable’ in the opinion of Central Government or which satisfies the conditions prescribed under rule 18(2). For more information check Name Availability Guidelines.
In case any Body Corporate is partner, copy of Board resolution authorizing the incorporation of LLP shall be attached
Undesirable Names- Connote
If in the opinion of the department, the name by which a Company is registered gives so misleading an indication of the nature of its activities as to be likely to cause harm to the public, the department may direct it to change its name. A Company registered under the Companies Act, is not entitled to carry on its business in such a way or under such a name, as to represent that its business is the business of any other company or firm or person; and the absence of fraud is immaterial. In such cases, the old company or firm can apply to the court for an injunction, and in such cases the principles that apply to individuals trading under identical or similar names would become applicable.
Step IV Drafting of LLP Agreement
The next pertinent step is drafting of Limited Liability Partnership Agreement governing the mutual rights and duties among the partners and among the LLP and its partners.
The basic contents of Agreement are:
Name of LLP
Name of Partners & Designated Partners
Form of contribution
Profit Sharing ratio
Rights & Duties of Partners
Proposed Business
Rules for governing the LLP
In case no agreement is entered into, the rights & duties as prescribed under Schedule I to the LLP Act shall be applicable
It is not necessary to have the LLP Agreement signed at the time of incorporation, as the details of the same needs to field in eform 3 within 30 days of incorporation but in order to avoid any dispute between the partners as to the terms & conditions of the agreement after the formation of LLP, it is always beneficial to have the LLP Agreement drafted and executed before the incorporation of the LLP.
In case the Agreement is executed outside India, than it must be notarized and consularized,
Step- V
Filing of Incorporation Documents
Next is the filing of Incorporation documents, consent of Partners and declaration electronically through the medium of e-forms prescribed with the Registrar of LLP for incorporation of the LLP on payment of prescribed fees based on the total monetary value of contribution of partners in the proposed LLP.
eForm 2: Incorporation Document
This is an informative document setting down the details of LLP, its Partners including designated partners along with their amount of contribution and consent for forming a Limited Liability Partnership to carry on a lawful business with profit motive along with declaration stating that all the requirements of Limited Liability Partnership Act, 2008 regarding incorporation of LLP in India have been complied with.
eForm 3: Details of LLP Agreement
This form provides for the necessary information in respect to the LLP Agreement entered into between the partners.
eForm 4: Consent of Partners Consent of each partner to become a partner of Limited Liability Partnership along with their address and identity proof to be filed with the Registrar of Companies.
Subscription Sheet: Just like in case of Company formation, the partners are required to subscribe their names along with signatures to the subscription sheet, which shall be witnessed by any chartered Accountant/Company Secretary/Advocate in practice.
In case the subscription sheet is executed outside India, than it must be notarized and consularized,
eForm 3 & 4 are required to filed within 30 days of the incorporation.
All the eforms will be digitally signed by any Designated partner and shall be certified by an advocate/company secretary/chartered accountant/cost accountant in practice engaged in the formation of LLP.
Key points:
Filling will be done on www.llp.gov.in
with All the Designated Partners need to be register as Business User.
Digital Signature is required only for the Designated Partner who would be signing all the e Forms.
Step VI Certificate of Incorporation
After the Registrar is satisfied that all the formalities with respect to the incorporation has been complied , he will issue a Certificate of Incorporation as to formation of the LLP within maximum of 14 days from date of filing of documents . The Certificate of Incorporation issued shall be the conclusive evidence of formation of the LLP.
Documents Required:
eForm 1-Name Availability Application
eForm 2-Incorporation Document
eForm 3- Details of LLP Agreement
eForm 4-Consent of Partners
eForm 7-Application for Designated Partners Identification Number
Subscription Sheet
LLP Agreement duly stamped as per relevant Stamp Act of the State.
Proof of Address of Registered Office
Consent of Partners and Designated Partners
Check list for application under Section 295 and Section 372A of the Companies Act, 1956
PLEASE ENSURE WHILE SUBMITTING THE APPLICATION IN RESPECT OF LOANS / CORPORATE GUARANTEE OR FURNISHING SECURITY UNDER SECTION 295 & 372 A OF THE COMPANIES ACT, 1956 THAT THE FOLLOWING INFORMATION / DOCUMENTS HAVE BEEN FURNISHED:
1. The application should be addressed to The Secretary, Department Of Company Affairs, of the Jurisdiction in which you are falling.
2. Application should be submitted along with the prescribed fee by demand draft drawn in favour of Pay & Accounts Officer, Department of Company Affairs, of the Jurisdiction in which you are fallingin the manner provided by GSR No.501 (E) dated 6.7.1999: -
For application made By Companies
Amount of fee to be paid in Rs.
With Authorised share capital:
a) Less than Rs.25,00,000 / -
500
b) Rs.25 lacs or more but less than Rs.5 Crores
1000
c) Rs.5 Crores or more.
2000
3. The rate of interest proposed on the loan should not be less than the four percent above the prevailing bank rate being the standard rate made public under sec 49 of the R.B.I Act, 1934.
4. The quantum of loan along with other loans taken, if any, should not exceed 25 times of gross salary drawn in the proceeding six months prior to making of the application.
5. No guarantee commission shall be allowed to be paid to anyone in respect of the proposals.
The application should be accompanied by the following documents:
6. The proposal should be approved at the meeting of the board. A certified copy of resolution passed should be submitted indicating the proposal of the company, terms and conditions, interest of the directors / relatives if any, clearly specifying
the rate of interest chargeable,
the schedule and terms of repayment
the loan is not being made out of borrowed funds of the company
any other major or important condition having bearing on the loan / financial position of the company.
7. Wherever required members’ specific approval be obtained for proposal .The resolution along with explanatory statement should contain all the relevant details as mentioned in point 6 above. A certified copy of the resolution along with explanatory statement so passed should also be enclosed.
8. The proposal should be accompanied with the declaration that the company has not defaulted in making repayments to the investors the amounts as and when they become due to them.
9. Certified copy of the Memorandum & Articles of Association of Applicant Company.
10. Shareholding pattern of the companies (applicant & borrower), common interest and controlling interest should specially state the interest of director along with his/her relative. (For Sec372A applications)
11. List of Directors of the Board of both the companies (applicant & borrower companies wherever applicable) and disclosing inter-se interest, if any.
12. Financial position and net worth of both the companies for three years along with copies of annual reports.
13. Certified copy of draft loan agreement.
14. If the loan is backed by any guarantees, then the name and particulars of the grantors with their consent.
15. Details of the loan given / corporate guarantee given or security provided to any company / person / firm etc so far along with proof of compliance of Sec372A, wherever applicable should also be furnished.
16. Details of the loan given / corporate guarantee given or security provided to any company / person / firm etc so far under Sec.295, details thereof should be provided.
17. Company should give a declaration to the effect that funds proposed to be loaned are not required for its working capital requirements at least for a year.
18. A certified copy of the loan scheme for the employees of the company, if any.
19. Justification for quantum of loan / guarantee or furnishing security by the company.
20. In respect of all proposals, a certificate from the statutory auditors or a company secretary in whole–time practice to the following effect be enclosed stating therein that
the proposal is in conformity within the provisions of Section 372A of the Companies Act, 1956.
the company has not defaulted in
the repayment of any Fixed deposits accepted by the company under Section 58 A of the Companies Act, 1956 or part thereof or interest thereon
Payment of dividend
Redemption / repayment of debenture and timely payment of interest thereon
Redemption preference shares and
the Company is regular in filing all forms / returns as required to be filed under the Companies Act 1956.
21. A NOC / prior approval of public financial institutions / banks in case any term loan is subsisting.
Accounting standards check list
INDIAN ACCOUNTING STANDARDS COMPLIANCE CHECKLIST
Objective of the checklist
The checklist is designed to verify compliance with Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) and can be used by accountants, auditors, audit committee members, etc. When a more thorough understanding of a Standard is needed, reference should be made to the full text of the original pronouncement. The checklist is not to be regarded as a substitute for a detail understanding or interpretation of the Standards.
Members duty in respect of Accounting Standards
The Preface to the Statements of Accounting Standards issued by ICAI states that while discharging their attest functions, it will be the duty of members of ICAI to ensure that the Accounting Standards are implemented in the presentation of financial statements covered by their audit reports. In the event of any deviation from the Standards, it will be also their duty to make adequate disclosure in their reports so that the users of such financial statements may be aware of such deviations.
Accounting Standards and the Companies Act
Section 217(2AA) requires that the board’s report should include a directors responsibility statement indicating therein:
that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
that the directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period;
that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and
that the directors had prepared the annual accounts on a going concern basis.
Section 211 (3B) requires where the profit and loss account and the balance sheet of the company do not comply with the accounting standards, such companies shall disclose in its profit and loss account and the balance sheet, the following:
the deviation from the accounting standards;
the reasons for such deviation; and
the financial effect, if any arising due to such deviations.
Section 227(3)(d) of the Companies Act also requires the auditor’s report to state whether in his opinion, the profit and loss account and balance sheet comply with the Accounting Standards referred to in sub-section (3C) of section 211(specified standards). The standards of accounting specified by ICAI shall be deemed to be accounting standards until the accounting standards are prescribed by the Central Government under section 211(3C) of the Act. Other than AS 3, all standards issued upto AS 18, Related Party Disclosures, are specified standards. Insofar as AS 18 is concerned, it is mandatory to only the following enterprises and not to all enterprises:
Listed or to be listed enterprises
All other commercial enterprises whose turnover for an accounting period exceeds Rs 50 crores.
In respect of new accounting standards issued after AS 18, the accounting standards specified by ICAI are those accounting standards which have been made mandatory by ICAI as indicated in the standard or a separate announcement. The statutory auditors of such companies are required to give an assertion in respect of compliance with the specified accounting standards while reporting under section 227(3)(d) of the Companies Act. In making this announcement it appears that ICAI has not highlighted the fact that AS 25 in respect of ‘Interim Financial Reporting’ (other than paragraph 25 of AS 25) and AS 21 ‘Consolidated Financial Statements’ does not apply to annual financial statements under the Companies Act and therefore logically are not specified standards.
Tax accounts
As regards tax accounts, ICAI is of the view that the mandatory accounting standards would apply to tax accounts, even if these are not adopted by the tax authorities. Therefore where mandatory accounting standards are not complied with in the tax accounts, the auditor would be required to qualify such accounts.
SEBI and Accounting Standards
SEBI requires the auditors in their half yearly limited review report in respect of listed companies to opine whether they are prepared in accordance with accounting standards. SEBI circular SMDRP/Policy/Cir -44/01 dated August 31, 2001 requires compliance with mandatory accounting standards in the preparation of quarterly results. However, the preparation of consolidated financial statements on a quarterly basis is voluntary but mandatory for disclosure in the annual report. Related party disclosures are not required to be made on a quarterly basis, but disclosure is mandatory in the annual financial statements. Similarly, cash flow statements are to be presented only on an annual basis under the indirect method in AS 3. Segmental disclosures on an annual basis are made on the basis of AS 17. For quarterly disclosures, SEBI has devised its own format for disclosure of segment information. EPS for quarterly and annual financial statements should be determined in accordance with AS 20. The disclosure requirements under various other mandatory standards should be complied with in the annual financial statements, though for quarterly disclosure purposes SEBI’s format should be adhered to. The accounting treatment required to be given under these mandatory standards should nevertheless be adhered to in the preparation of quarterly and annual financial statements.
IRDA and Accounting Standards
The notification of Insurance Regulatory and Development Authority requires insurance enterprises to follow the accounting standards issued by ICAI.
Do Accounting Standards override local legislation?
As per the preface to the accounting standards, by their very nature accounting standards cannot and do not override local regulations (include high court orders) which govern the preparation and presentation of financial statements. However, ICAI will determine the extent of disclosure to be made in the financial statements and the auditors report. Such disclosure may be by way of appropriate notes explaining the treatment of particular items. Such explanatory notes will be only in the nature of clarification and therefore need not be treated as adverse comments on the related financial statements. In a recent general clarification on AS 14 (amalgamations) ICAI has prescribed the nature of disclosure required when accounts are not drawn in accordance with AS 14 but are drawn in accordance with the high court order. Even in the case of high court orders dealing with situations other than amalgamations, which may be inconsistent with accounting standards, full disclosure in the financial statements and the auditors report would be sufficient. In these cases auditor may state that the mandatory accounting standards are not complied with, without giving a subject to or an adverse opinion on the true and fair view of the financial statements.
Audit Committee and Accounting Standards
As part of the SEBI Corporate Governance requirement, audit committees of listed enterprises are required to review accounting practices including compliance with accounting standards. Under section 292A of the Companies Act, every public company having paid up capital of not less than Rs 5 crores shall constitute an audit committee. Such audit committees would liase with internal and statutory auditors and may discuss amongst other things compliance with accounting standards.
Accounting Standards and Banks
It may be noted that all Accounting Standards are not mandatory in nature for all enterprises. The status of Accounting Standards is given below. The user of the checklist should first determine the applicability of the various accounting standards to his/her enterprise based on ICAI or SEBI requirements and accordingly proceed to complete the checklist. The applicability of certain new accounting standards in respect of banks is set out below.
Compliance by banks with Accounting Standards (AS) –Applicability of AS 17,18,21 and 22
DBOD.No.BP.BC. 109 /21.04.018/2001-02
May 29, 2002
All Scheduled Commercial Banks(excluding RRBs and LABs)
Dear Sir,Compliance by banks with Accounting Standards (AS) –Applicability of AS 17,18,21 and 22
As you are aware, in terms of the amended / new clauses of the revised listing agreement with stock exchanges, listed banks are required to mandatorily comply with all the Accounting Standards (AS) issued by the Institute of Chartered Accountants of India (ICAI) from time to time. Banks have expressed difficulties in complying with certain Accounting Standards especially AS 17 on Segment Reporting, AS 18 on Related Party Disclosure, AS 21 on Consolidated Financial Statements and AS 22 on Taxes on Income. The difficulties arise
due to absence of uniform disclosure formats,
due to absence of appropriate MIS to support the comprehensive disclosures, and
due to the likely impact on their regulatory compliances.
In accordance with the announcement made in Paragraph 73 of the Mid-Term Review of Monetary and Credit Policy for the year 2001-2002 in October 2001, the RBI has set up a Working Group under the Chairmanship of Shri. N.D.Gupta, the then President of the ICAI, with representatives, inter alia, of IBA, banks and RBI to identify the compliance as also gaps in compliance with Accounting Standards issued by the ICAI and recommend steps to eliminate/reduce the gaps. The difficulties expressed by the banks are being discussed in detail in the meetings of the above Working Group and the Working Group is expected to submit its recommendations shortly for eliminating / reducing the gaps in compliance by banks with the Accounting Standards. The constraints faced by banks in the interim have also been apprised to SEBI.
In view of the above, keeping in view the nature of operations of banks and the need to ensure uniformity in regulatory requirements, it has been decided that compliance with the following Accounting Standards be made optional for banks only for the financial year ended 31st March 2002 :
AS 17 on Segment Reporting,
AS 18 on Related Party Disclosure,
AS 21 on Consolidated Financial Statements, and
AS 22 on Taxes on Income.
It may be noted that the above exemption is limited to the financial year ended 31st March 2002. Banks would be required to conform to the above Accounting Standards by 31st March, 2003 in accordance with the detailed guidelines to be issued shortly on the basis of the recommendations of the above Working Group.
Accounting Standard and Mutual Funds
As per the Preface on Accounting Standards issued by ICAI, accounting standards apply to general purpose financial statements of enterprises which includes trusts. ICAI would make efforts to issue accounting standards which are in conformity with the provisions of the applicable laws, customs, usages and business environment in India. However, if due to subsequent amendmends in the law, a particular accounting standard is found to be not in conformity with such law, the provisions of the said law will prevail and the financial statements would be prepared in conformity with such law. In relation to mutual funds accounting treatment and disclosure requirements as required under SEBI mutual fund regulations should be followed. Where for a particular matter SEBI regulations have not prescribed the accounting treatment, ICAI standards should be followed. Where an accounting standard is inconsistent with SEBI’s mutual fund regulations and the financial statements are appropriately prepared in accordance with SEBI regulations, an auditors qualification on mandatory standards issued by ICAI is inappropriate, though a clarificatory note should be included in the audit report. AS 13 specifically excludes AMC’s and mutual funds, therefore in that regard SEBI mutual fund regulations on accounting, disclosure and valuation of investments should be followed.
Accounting Standards and Co-operative Societies – GC 12/2002
ICAI has issued GC 12/2002 clarifying the applicability of accounting standards to co-operative societies, which is reproduced below and is self explanatory.
Paragraph 3.3 of the ‘Preface to the Statements of Accounting Standards’ provides, inter alia, as below:
“3.3 The Institute will issue the Accounting Standards for use in the presentation of the general purpose financial statements issued to the public by such commercial, industrial or business enterprises as may be specified by the Institute from time to time and subject to the attest function of its members.”
In view of the above, the accounting standards issued by the Institute shall apply in respect of financial statements of co-operative societies, which carry on commercial, industrial or business activities, and are subject to the attest function of the members of the Institute. The Accounting Standards made mandatory by the Institute, as specified in the respective standards or made mandatory by separate announcements, are also mandatory in respect of co-operative societies.
For the removal of doubts, it is clarified that even if a very small proportion of the activities of a co-operative society is considered to be commercial, industrial or business in nature, then it can not claim exemption from the application of Accounting Standards. The Accounting Standards would apply to all its activities including those which are not commercial, industrial or business in nature
It is reiterated that mandatory status of an accounting standard implies that it will be the duty of the members of the Institute to examine whether the Accounting Standard is complied with in the presentation of financial statements covered by their audit. In the event of any deviation from the Accounting Standard, it will be their duty to make adequate disclosures in their audit reports so that the users of financial statements may be aware of such deviations.
Though the clarification has been issued in the context of co-operative societies its application is much wider.
Checklist on Interim financial statements
The checklist does not include requirements of AS 25 – Interim Financial Reporting because it predominantly applies to interim financial statements and is therefore included in the chapter on AS 25 – Interim Financial Reporting. As per AS 25, if an estimate of an amount reported in an interim period is changed significantly during the final interim period of the financial year but a separate financial report is not prepared and presented for that final interim period, the nature and amount of that change in estimate should be disclosed in a note to the annual financial statements for that financial year. As mentioned elsewhere, AS 25 applies to SEBI quarterly accounts only to the extent of recognition and measurement principles and not in respect of the disclosure requirements, which are superseded by SEBI disclosure requirements. However, AS 25 would prevail in respect of the disclosures to be made in regards to annual financial statements. To that extent, this AS 25 requirement will have to be complied with in the annual financial statements.
General clarifications and Accounting Standard Interpretations
ICAI has been issuing accounting standard interpretations and general clarifications on accounting standards. The status of these promulgations and the authority attached to it is not clear. Whether non-compliance with the accounting standards interpretations and general clarifications would tantamount to non-compliance with the accounting standards under section 211 of the Companies Act. Ofcourse the best authority to clarify this would be ICAI itself. In its absence a conservative view that these promulgations are equivalent to an accounting standard should be taken, which is the approach taken in the context of accounting standards interpretation statement under IAS. The checklist includes accounting standards interpretation and general clarifications, where relevant.
Check list of Firm to company under Companies act, 1956
Conversion of Firm under Part IX of the Companies Act, 1956 :- The firm may be converted into a company by following the provisions of Part IX of the Companies Act, 1956. Sections 565 to 581 deal with conversion of firms into a company under the Companies Act, 1956.
For the purpose of Part IX so far as it relates to the registration of 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. Such a company, when registered with limited liability under the Companies Act, 1956 shall be deemed to be a company limited by shares.
A company cannot be registered under part IX unless the assent of majority of its members as are present in person or where proxies are allowed, by proxy, at a general meeting summoned for the purpose is obtained.
Since the liability of the members of the firm is unlimited, when a firm desires to register itself as a company under Part IX as a limited company, the majority required to assent as aforesaid shall consist of not less than ¾ of the members as are present in person or where proxies are allowed, by proxy, at a general meeting summoned for the purpose.
Steps for incorporation of company under part IX
Step 1
Hold a meeting of the partners to transact the following business
Assent of majority of its members as are present in person or where proxies are allowed, by proxy, at a general meeting summoned for the purpose of registering the firm under Part IX of the Companies Act, 1956. Since the liability of the members of the firm is unlimited, when a firm desires to register itself as a company under Part IX as a limited company, the majority required to assent as aforesaid shall consist of not less than ¾ of the members as are present in person or where proxies are allowed, by proxy, at a general meeting summoned for the purpose.
To authorize one or more partners to take all steps necessary and to execute all papers, deeds, documents etc. pursuant to registration of the firm as a Company.
To execute a supplementary Partnership Deed to align it with the requirements as under:
There must be at least 7 partners in the partnership firm;
The firm may be registered with the Registrar of Firms;
There must be a fixed capital divided into units ;
There must be provision of converting a firm into company.
There must be an agreement by the partners to convert the partnership to a company. This can be done by a contract in writing to this effect to which the partner’s resolution for conversion can be attached as annexure.
Execute a settlement deed.
Step 2
APPLICATION FOR DIRECTOR’S IDENTIFICATION NUMBER AND DIGITAL SIGNATURERS CERTIFICATE
Ministry of Company Affairs has made Director’s Identification Number mandatory for each Director. Following details are required for DIN: Name(s) , Father’s Name(s), Permanent Residential Address(s), Present Residential Address(s), Occupation, Name of the Companies in which the promoter is Director/Promoter, Date of Birth , E-mail IDs (Minimum 2 for private company).
Ministry of Company affairs have initiated the process of E-filing of the Documents, wherein the either of the Director needs to have Digital Signature Certificate. For the matter of Convenience in submission of documents with Registrar of Companies and expediting the processing, it is advisable to obtain the Digital Signature Certificate from prescribed authorities.
Following documents are required for DIN/Digital Signature: Copy of Passport/ Voter ID/Ration Card/Driving License/ PAN Card/Telephone Bill/Electricity Bill/Bank Statement.
The application is required to be signed by the promoter(s).
Normally the process takes 5 to 7 working days after submitting the documents with DIN Cell.
Note: In case of a Private Limited Company at least two Directors should be appointed.
Step 3
NAME APPROVAL
An application in Form No. 1A needs to be filed with the Registrar of Companies (ROC) with following annexure(s) stating the fact that the partnership firm proposed to be converted under part IX of the Companies Act. (Annexure 1).
Certified true copy of Partnership Deed .
Certified true copy of the latest balance sheet of the partnership.
Certified true copy of the latest income tax assessment order/return.
Consent of all the partners stating that they have agreed to register the partnership firm as a Company .
Certified True Copy of the resolution passed by the firm in this regard .
The application is required to be digitally signed by one of the promoters.
The details to be state in the said application are as follows :
1. Maximum Six alternative names for the proposed company. (in order of preference)
2. Names , Father’s/ Husband’s Name, Permanent Residential Addresses, Present Residential Address, Occupation, Name of the Companies in which the Promoter is Director/Promoter , Date of Birth , DIN of the Promoters.
3. Authorised Capital of the proposed Company.
4. Main objects of the proposed company.
5. State of Registered Office of Company
6. Copy of Trade Mark Application/Certificate If name of proposed company based on a Trade Mark,
Note:
As per Indian Companies Act, 1956, a Private Company should have a minimum Paid up Capital of Rupees One Lac.
As per Indian Companies Act, 1956 there should be at least two promoters in a Private Limited Company.
The Registrar of Companies will ordinarily inform within a period of seven days from the date of submission of the application whether any of the names applied for is available.
If the name is not made available, the Registrar of Companies may reject the application and if it happens, new names to be provided for approval.
Step 4
Registration of Company
On obtaining the approval of name , file the following documents with the registrar of Companies within 60 days from the date of name approval
Two sets of Memorandum and Articles of Association of the Company. One set shall be duly stamped. A memorandum of association and articles of association may be made for the company which will be similar in all respects to a normal Memorandum and Articles of Association except that it incorporate therein terms of settlement deed.
After drafting The Memorandum and Articles of Association is required to be stamped as per the Indian Stamp Act. (in Delhi its Rs. 200/- on MOA & 0.15% of Authorized Capital on AOA).
Thereafter these documents are required to be executed by the promoters in their own hand in the presence of professionals after the date of Stamping of Memorandum & Article of Association in duplicate stating their full name, father’s name, residential address, occupation, number of shares subscribed for & Signature etc.
However, if any director is foreigner and not present in India after the date of Stamping of the Memorandum & Article of Association, in that case, his signature should be attested in Indian Embassy located in his home country.
Form No. 1 – This is a declaration to be executed on a non-judicial stamp paper by one of the directors of the proposed company or other specified persons such as Chartered Accountants, Company Secretaries, Advocates, etc. stating that all the requirements of the incorporation have been complied with. (Annexure 2)
Form No. 18 – This is a form to be filed by one of the directors of the company informing the ROC the registered office of the proposed company. (Annexure 3).
Form No.: 32 – This is a form stating the fact of appointment of the proposed directors on the board of directors from the date of incorporation of the proposed company and is signed by one of the proposed directors. (Annexure 4).
Power of Attorney signed by all the subscribers of MOA authorizing one of the subscribers or any other person to act on their behalf for the purpose of incorporation and accepting the certificate of incorporation.
Form No. 37 along with Form No. 39 (Annexure 5 & 6).
Declaration by two partners verifying the particulars set forth in the above mentioned documents.
Consent letters from Directors
Filing fees as may be applicable
Other information to be submitted:
i) A list showing the names, addresses and occupations of all persons who on a day named in the list, not being more than 6 clear days before the date 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.
ii) If the company is intended to be registered as a limited company, a statement specifying the following particulars :-
a) the nominal share capital of the company and the number of shares into which it is divided or the amount of stock of which it consists
b) the number of shares taken and the amount paid of each share
c) the name of the company, with the addition of the word “Limited” or “Private Limited” as the case may be, as the last word / words, in case the company is being registered with limited liability.
Step 5
On completion of the formalities, the registrar shall register the Company under Part IX of the Act and issue a certificate of incorporation.
Steps for Incorporation of a public limited company
First Five stages are almost same for incorporation of a public limited company except there should be at least seven subscribers, three directors and the minimum paid up capital are Rs. 5 lacs.
After completion of first three stages a private limited company may commence its business but a public limited company is required to obtain certificate for commencement of business from Registrar of Companies. For obtaining the Certificate for commencement of its business, the Company is required to submit following documents with Registrar of Companies:
Form 20 to be executed on a non-judicial stamp paper (Annexure 5)
Statement in lieu of Prospectus
Affidavit from each directors stating that the Company has not commenced its Business
Details of Preliminary expenses
Board Resolution for approval of preliminary expenses.
Board resolution for appointment of first Auditors
Consent letter from the Auditors for acting as there Statutory Auditors.
Registrar of Companies thereafter shall process the documents and if all the documents are in order then it will issue a Certificate for commencement of Business.
Steps after incorporation of private company
Once the new company is formed, the takeover agreement would be entered between the Partnership Firm and the newly incorporated company.
Convene a Board Meeting after giving notice to all the directors of the newly incorporated company immediately after incorporation as per section 286 of the Companies Act, 1956 to adopt the agreement entered into by the company and the partner of the firm for the acquisition of business of the firm.
In such a situation, the entire business of the firm along with all its assets and liabilities is transferred to the company.
The company may issue shares or other securities to the Partner of the firm.
Steps after incorporation of public company
Once the new company is formed, the takeover agreement would be entered between the Partnership firm and the newly incorporated company.
Convene a Board Meeting after giving notice to all the directors of the newly incorporated company immediately after incorporation as per section 286 of the Companies Act, 1956 to adopt the agreement entered into by the company.
In the above Board Meeting also fix up the date, time , place and agenda for calling a General Meeting to pass a Special Resolution under section 81(1A) of the Companies Act, 1956 giving powers to the Board of Directors to issue and allot equity shares to Partners of the firm.
Effect of Registration under part IX
Vesting of Property : All property, movable as well as immovable belonging to or vested in the firm at the time of registration shall, on such registration pass to and vest in the company as incorporated under Part IX.
The Registration of a company under Part IX shall not in any manner 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 firm before registration.
All suits and other legal proceedings taken by or against the company or any public officer or member thereof which where pending at the time of registration may be continued in the same manner as if registration had not taken place. However, no execution can be done against the property or person of any individual member of the company on any decree or order obtained in such suit or proceeding. If the property of the company is inadequate to satisfy the decree or order, an order for winding up the company may be obtained.
All provisions of any Indian law or other instrument constituting or regulating the company shall apply to the registered company in the same manner as if the company had been formed under the Companies Act, 1956 and those conditions were required to be contained and were contained in its Memorandum and Articles of Association.
As per section 383A of the Companies Act, if the paid up capital of the Company is Rs. 500 lacs or more than the company is required to appoint a full time Company Secretary.
As per section 269 of the Companies Act, 1956 if the paid up capital of the company is Rs. 500 Lacs or more than the Company is required to appoint either Managing Director or Whole Time Director or Manager.
Debts and liabilities are not automatically transferred to the new company and therefore a novation agreement will have to be entered into by the company with its debtors and creditors.
Obtain an indemnity from the company to the partnership firm for all acts, deeds and things done after the registration under Part IX and vice versa.
Comply with all the relevant provisions of the Companies Act, 1956 i.e. call requisite meetings, register charges, comply with section 58A if necessary, etc.
Stamp duty. Conversion of firm to company is exempted from payment of stamp duty as there is no change in the ownership and no transfer is involved
PROVISIONS UNDER THE COMPANIES ACT, 1956 FOR PAYMENT OF DIVIDEND
Payment of Dividend comes under section 205 of The Companies Act, 1956.
Gist of Section 205
Company can declare and pay dividend for any financial year only out of following two sources
Out of profits of the Company for that year.
Out of profits of the Company for any previous financial years.
Calculation of available profit for the payment of dividend
Available profit for payment of dividend means Current profit. Current profit means profit after tax arrived after making following provisions
· for depreciation in respect of each item of depreciable asset for such an amount as is arrived by dividing 95% of the original cost thereof to the Company by the specified period in respect of such asset as mention in section 350 and schedule XIV. Schedule XIV specify minimum rate of depreciation for different class of assets (subsection 2 of Section 205).
· Transferring to the reserve of the Company of such percentage of profits for that year not exceeding ten percent as may be prescribed
Transfer of profit to Reserve Fund is governed by Companies (Transfer of Profit to Reserves) Rules, 1975 as per this rule No dividend shall be declared or paid by a Company for any financial year out of the profits of the Company for that year arrived after providing for depreciation in accordance with the provision of subsection 2 of section 205 (as mentioned above) except after the transfer to the reserves of the Company of percentage of its profits for that year as specified below:-
=) where the dividend proposed exceeds 10% but not 12.5% of the paid up capital the amount to be transferred to the reserves shall not be less than 2.5% of the current profits.
=) where the dividend proposed exceeds 12.5% but does not exceed 15% of the paid up capital, the amount to be transferred to the reserves shall not be less than 5% of the current profits;
=) where the dividend proposed exceeds 15% but does not exceed 20% of the paid up capital the amount to be transferred to the reserve shall not be less than 7.5% of the current profits
=) where the dividend proposed exceeds 20% of the paid up capital, the amount to be transferred to reserve shall not be less than 10% of the current profits
Consequences of non-Compliance.
If a company fails to comply with any of the provisions of contained in these rules,the company and every officer of the Company in default shall be punishable with fine which may extend to five hundred rupees and where the contravention is a continuing one with a further fine which may extend to fifty rupees for every day ,after the first day, during which such contravention continues .
Important Departments clarification regarding transfer to Reserve :
· No amounts is required to be transferred to reserve if dividend is less than 10% .
· The amount to be transferred to the General Reserve would be worked out in respect of the profits of the year in question and without bringing in the profits of the past year.
· Reserve referred in this section means free reserve.
· Rules regarding provision of depreciation and reserve is applicable only for equity dividend and also to the portion of dividend to participating preference shares over and above the fixed rate of preference dividend
Important Departments clarification regarding depreciation provision :
· The rates contained in schedule XIV should be viewed as the minimum rates and therefore a Company shall not be permitted to charge depreciation at rates lower than those specified in the schedule in relation to assets purchased after the date of applicability of the schedule. However, if on the basis of bona-fide technological evaluation, higher rates of depreciation are justified, they may be provided with proper disclosure by way of note forming part of annual accounts.
SECRETARIAL POINTS FOR DIVIDEND DECLARATION
· Check whether dividend/interim dividend was declared out of profits arrived after providing for depreciation.
· In case no depreciation was provided ensure that approval was obtained from the Company Law Board before declaring the dividend/ interim dividend [205(1)(c)]
· Check whether the depreciation was provided in accordance with the methods specified in Section 205(2)
· Ensure that the minimum prescribed amount had been transferred to reserve according to the Companies (transfer of Profits to Reserves ) Rules, 1975,
· Conditions governed to transfer of higher percentage to reserve have been complied with.
· Ensure that the Board resolution recommending dividend or declaring interim dividend was passed.
· Ensure that register of members was closed as per provision of the section 154.
· Ensure that final dividend was declared only In the Annual General Meeting.
· Ensure that the amount of dividend including interim dividend has been deposited in a separate bank account within 5 days from the date of declaration of such dividend
· Ensure that the provision of sections 205, 205A, 205C, 206A and 207 has been complied with in case of interim dividend also.
· Ensure that the dividend /Interim dividend has been paid in the prescribed manner.
· Ensure that corporate dividend tax has been deposited within 14 days of the declaration of dividend /interim dividend.
· Ensure that dividend /interim dividend has been paid within 30 days to the registered holders or to their orders (section 207)
· Ensure that procedure prescribed by Reserve Bank of India for payment of dividend to non-resident shareholder has been complied with before dividend was remitted to them.
· Intimation sent to stock Exchange, in case of listed Company.
· If there were any complaints regarding non-payment or delay in payment of dividend ,ensure whether corrective action taken?
Documents involved
1. Dividend payment Register
2. Dividend Warrant
3. Minutes of Board Meeting
4. Minutes of General Meeting
5. Form 1 of unpaid Dividend Rules Etc.
6. Exchange Control Manual
7. Company Law Board permission, if necessary.
8. Register of Members
9. Unpaid Account register
10. Notice of Closure for register of Members.
CALENDAR OF EVENTS
For passing Resolution(s) through Postal Ballot Scheme
PARTICULARS OF EVENTS
DATE
Date of Dispatch of Notice of Meeting in which the business as notified by the Central Government will also be transacted through Postal Ballot.
March __, 2006
Date of completion of dispatch of Notice along with Postal Ballot and postage pre-paid envelope.
March __, 2006
Date on which consent given by Mr. ________________ to act as Scrutinizer.
March __, 2006
Date of appointment of Mr. ________________ as Scrutinizer.
March __, 2006
Last date for receiving Postal Ballot papers by Scrutinizer
April __, 2006
Date of signing of the minutes book by the Chairman in which the results of the ballot is recorded
April __, 2006
Date of returning the Ballot papers, Register required to be maintained by the Scrutinizer under Rule 5(e) of the Companies (Passing of the Resolutions by Postal Ballot) Rules, 2001 and other related papers to the Chairman by the Scrutinizer.
April __, 2006
Date of Board resolution authorising two Directors to be responsible for the entire poll process.
March __, 2006
Date of submission of Report by Scrutinizer.
April __, 2006
Date of Declaration of Result by the Chairman
April __, 2006
Gist of requirement for obtaining of license for formation of Company u/s 25 of the Companies Act, 1956
Step No
Particulars of Action / Documents required
Official Fees or O/P Expenses
Processing period
1.
Apply in Form No. 1A to concerned ROC, for availability of name in order of preference
Info required: -
a) Full name & residential address of each of promoters.
b) Four names of the proposed Company in order of their preference (without addition to its name of the word "Limited" or the words "Private Limited").
c) Proposed main object of the proposed Company (shall be one as depicted u/s 25 of the Companies Act, 1956).
# Mention that the proposed Company is to be formed under provisions of Sec. 25 of the Companies Act, 1956.
Rs.500/-
DD in favor of "Registrar of Companies, Maharashtra, Mumbai & payable at Mumbai".
3 - 4 working days
2.
After the name is approved, prepare Memorandum & Articles of Association, preferably get it vetted by ROC / RD. Keep in mind that the MOA & AOA are drawn in consonance with provisions of the Sec. 25 & other applicable provisions of the Companies Act, 1956.
N.A
3 - 4 working days
3.
Make an application with to the Concerned Regional Director for issue of license under Section 25 of the Companies Act, 1956 with all the requisite enclosure as given under:-
i) Three Copies of MOA & AOA of the proposed Company.
ii) A declaration confirming the application by CA / CS / Advocate on prescribed Stamp Paper.
iii) Three copies of list of names, descriptions, addresses & occupation of the promoters as well as the members of Board of Directors of the proposed Company.
iv) A statement showing details of assets & liabilities of the Association as on date with the application.
v) An estimate of future annual income & expenditure of the proposed company, specifying the source of income & object of expenditure.
vi) A statement giving brief description of work, if any, already done by the association.
vii) A statement specifying briefly the grounds on which the application is made.
viii) A declaration in prescribed form on non-judicial stamp paper by each person making an application.
ix) A letter of authority.
x) Copy of notice pursuant to regulation 11 of the Companies Regulation, 1956.
Note:
a) Prepare another 4 extra sets of documents for furnishing the same to ROC, Office Copy & Copy to Client. (1 original + 5 photocopies will suffice).
b) Copy of PAN card and copy of proof of residential address (ration card / passport/ election card) of each of the promoter is also to be attached with the application. These copies shall be certified as true copy by CA / CS / Advocate.
c) The declaration by each promoter is to be notarized by public notary.
d) Notice pursuant to regulation 11 of the Companies Regulation, 1956 shall be published within one week before or after the admission of the application in one or more newspapers (one in english and other in vernacular local newspaper). # As a matter of general practice the notice is published one week prior to date of application with the RD.
e) Address of place of registered office of the proposed company is to be indicated by way of requisite form along with the full address of the place of police station under whose jurisdiction the RO falls.
i) Rs.500/-,
DD in favor of "Pay & Accounts Officer, Department of Company Affairs, Mumbai & payable at Mumbai"
ii) Rs.100/- non-judicial stamp paper each in the name of each promoter for providing declaration in prescribed form.
iii) Two Rs.100/- non-judicial stamp paper each in the name of one of the promoter for confirming the application & letter of authority respectively.
iv) Actual expenses incurred with public notary for notarization of each declaration.
v) Actual expenses relating to publication of notice pursuant to regulation 11 of the Companies Regulation, 1956 (one in english and other in vernacular local newspaper).
8 - 10 working days (depending upon the preparation of documents, availability of each of the promoter and publication of notice in newspaper).
4.
Simultaneously furnish the copy of application with all its enclosure and accompanying papers to the concerned Registrar of Companies.
N.A
5.
On receipt of the above papers, the RD gets the MOA & AOA and other papers generally scrutinized, the RD will take the decision for grant of license to the application or not.
Rs.35000/-
30 - 45 working days
6.
On receipt of the license from RD, file the necessary papers with ROC for registration along with filing fees & forms. The ROC on making necessary scrutiny and correction will issue the certificate of incorporation.
Note:
a) Companies to be registered under this section need not have their MOA & AOA stamped under Article 39 of the Indian Stamp Act, 1899.
Maximum filing fees payable is Rs.5000/-.
8 - 10 working days
Steps involved ( in brief) in registration of Company under Section 25 of the Companies Act, 1956, being a Company for charitable or other public utility purpose without addition to its name of the word "Limited" or the words "Private Limited"
---------------------------------------------------------------------------------------------------------------------------------
1. Apply in Form No. 1A to concerned ROC, for availability of name in order of preference (without addition to its name of the word "Limited" or the words "Private Limited").
2. Prepare Memorandum & Articles of Association.
3. Make an application to the Concerned Regional Director for issue of license under Section 25 of the Companies Act, 1956.
The application should be accompanied by: -
i) Three Copies of MoA & AoA of the proposed Company.
ii) A declaration confirming the application by CA / CS / Advocate on prescribed Stamp Paper.
iii) Three copies of list of names, descriptions, addresses & occupation of the promoters as well as the members of Board of Directors of the proposed Company.
iv) A statement showing details of assets & liabilities of the Association as on date with the application.
v) An estimate of future annual income & expenditure of the proposed company, specifying the source of income & object of expenditure.
vi) A statement giving brief description of work, if any, already done by the association.
vii) A statement specifying briefly the grounds on which the application is made.
viii) A declaration in prescribed form on non-judicial stamp paper by each person making an application.
ix) A letter of authority.
x) Payment of prescribed fees. (being Rs.500/- at present, paid by way of DD in favor of "Pay & Accounts Officer, Department of Company Affairs, Mumbai & payable at Mumbai").
4. Notice pursuant to regulation 11 of the Companies Regulation, 1956 shall be published within one week before or after the admission of the application in one or more newspapers (one in english and other in vernacular local newspaper).
5. Simultaneously furnish the copy of application with all its enclosure and accompanying papers to the concerned Registrar of Companies.
6. On receipt of the copy the concerned ROC gets the draft MOA & AOA vetted and then list outs the modifications considered necessary and forwards the same to RD within fifteen days of receipt of the copy. He may normally advise RD to grant license to the proposed company or not.
7. The concerned ROC may consult for the views of District Magistrate of the state within whose jurisdiction the registered office of the proposed company is to be located. Copy sent to RD and reply is generally directly received by ROC from DM.
8. In case, the considerations for issue of license are more important, the RD may consult the State Government too. The RD may also consult the ministries concern and determine, if any, objections received.
9. On receipt of the above papers, the RD gets the MOA & AOA and other papers generally scrutinized.
10.Having received all the necessary views from the ROC, DM, State Government, the RD will take the decision for grant of license to the application or not. (Generally the license is granted within 30 days from the date of filing of application with the RD).
11.Departmental instruction shall be strictly followed. The license may be revoked, with Company's right to be heard.
12.After obtaining the license the MOA & AOA be printed as approved.
13.File the necessary papers with ROC for registration along with filing fees (maximum filing fees payable is Rs.5000/-) and also produce the license granted by the RD.
14.The ROC on making necessary scrutiny and correction will issue the certificate of incorporation.
Procedure for the incorporation of Non-profit Oriented Company
Introduction:
For incorporating a non – profit oriented company, the following three conditions must be satisfied as per Section 25 of the Companies Act, 1956:
i) The Company must be formed for promoting commerce, art, science, religion, charity or other useful object,
ii) The Company should apply its profits, if any, or other income in promoting the objects, and
iii) And should prohibit the payment of any dividend to its members.
The proposed Company, at the outset, have to obtain licence from the Central Government (now delegated to concerned Regional Director of the region) and then the Company may be incorporated with the Registrar of Companies.
The detailed procedure relating to same, is as follows:
Procedure:
Make an application in Form No. 1A, to the Registrar of Companies, for availability of the name.
Prepare a draft Memorandum and Articles of Association (and the Memorandum should be in the form specified in Annexure I to Company Regulations, 1956).
Make an application to the concerned Regional Director.
The application shall be accompanied by the following documents:
i) Three copies of the draft Memorandum and Articles of Association
ii) A declaration on non-judicial stamp paper by a Company Secretary in Practice to the effect that he has Memorandum and Articles have been drawn up in conformity with the provisions of the Act and that all requirements of the Act and rules have been duly complied with.
iii) 3 copies of a list of the names, descriptions, addresses and occupations of the promoters as well as members of the proposed Board of Directors.
iv) A statement showing in detail the assets (with estimated values) and liabilities of the association as on the date of application or within 7 days of that date.
v) An estimate of future annual income and expenditure of the Company, specifying the sources and objects of expenditure.
vi) A statement showing brief description of the work already done, and of the work proposed to be done.
vii) A statement specifying grounds of application
viii) A declaration by each person making the application in the form set out in Annexure V.
ix) Demand Draft for Rs. 500/- in favour of ‘Pay and Accounts Officer, Department of Company Affairs’ payable at Chennai (or a Treasury Challan may be obtained from the specified branches of Punjab National Bank).
Note: If any document is not English or Hindi – translation thereof, in English or Hindi, certified by the Promoter or the Director.
The Application along with all the enclosures has to be furnished to the Registrar of Companies, in which the Registered office of the proposed Company is to be situated.
The applicants shall within a week from the date of making the application publish the notice of the application (in Annexure II of the Companies Regulations), in a newspaper in principal language and in an English newspaper circulating in the district, where the Registered office of the proposed Company is to be situated.
A certified copy of the notice shall be sent forthwith to the Regional Director.
8. i) The Registrar of Companies, on receipt of the application, gets them thoroughly scrutinised and list out modification in the Memorandum and Articles, and forward the same to the Regional Director, within 15 days of the receipt of the copies.
ii) The RoC, will also indicate in his report whether there are other with similar objects.
iii) The RoC, also might have some personal knowledge of the promoters and members of the Board, and he normally advices to R.D whether or not to grant a licence.
iv) In certain circumstances, the RoC may refer the case to the District Magistrate.
9. The R.D. after considering the objections received from the public, RoC and after consulting any authority, Department and Ministries – will take a decision whether or not to grant licence.
The licence granted shall, however, be revocable by R.D. with the company’s right of being heard.
After obtaining the licence, insert the conditions subject to which the licence is granted in Memorandum and Articles.
Prepare all other forms along with altered Memorandum & Articles, as suggested by the R.D., and file it with the RoC with necessary registration and filing fees.
Note: Memorandum and Articles need not be stamped.
The RoC, on scrutiny, will issue the certificate of incorporation.
CHECK LIST FOR SUB DIVISION OF SHARES
1. Intimation of the date of Board Meeting to Stock Exchanges.
2. Outcome of the Board Meeting to be intimated to Stock Exchanges immediately after the closure of the meeting.
3. Board may decide either to pass the resolution in AGM/EGM or through postal ballot*.
4. Dispatch of notice to shareholders for convening the AGM/EGM for passing resolution to alter the Capital clause Memorandum and Articles (if any).
5. Publication of Notice of AGM/EGM in the newspapers.
6. Ordinary Resolution for sub-division of shares and Special Resolution for alteration of Articles of Association (if required) need to be passed in the Shareholders Meeting.
7. Intimation of outcome of meeting to Stock Exchanges.
8. Fix the Record Date for this purpose in the Board Meeting & Intimation of Record Date to Stock Exchanges and NSDL/CDSL and publication of Record Date in News Papers (not mandatory).
(The record date shall be fixed keeping in view the shareholders holding shares in physical form and interested in getting the sub-divided shares allotted in electronic form – The Company shall send a letter along with an option form to all the shareholders to give an option to receive such shares either in physical or in demat form. The record date may preferably fixed 1 to 11/2 month after the date of AGM/EGM/Date of declaration of Postal Ballot to enable the company to get responses from the shareholders and to initiate corporate action as per the option exercised by them)
9. File Form No.23 regarding Special Resolution with ROC.
10. File Form No.5 for sub-division of shares.
11. To fix the Board Meeting for allotment of sub-divided shares.
12. Hold Board Meeting and allot subdivided shares.
13. Corporate Action Forms need to be sent NSDL/CDSL well in advance before the record date for obtaining new ISIN and activation thereof.
14. Intimate Stock Exchanges about the New ISIN No. and other information as required by the exchanges.
15. On record date, the shareholders who are holding their shares in electronic form will automatically get credited their accounts with the subdivided shares.
16. Dispatch of Physical share certificates to shareholders against exchange / cancellation of old share certificates as the case may be.
Draft Board Resolution:
SUBDIVISION OF EQUITY SHARES OF THE COMPANY
“RESOLVED THAT subject to the consent of the shareholders in the ensuing _____ general meeting/ through postal ballot the consent of the Board of Directors be and is hereby accorded for the sub-division of existing equity shares of Rs.10/- each fully paid up into _____ equity shares of Rs. --- /- each fully paid-up.
RESOLVED FURTHER THAT ___________________________
RESOLVED FURTHER THAT Mr.---- , Managing Director and Mr.-------------, Secretary of the Company be and are hereby severally authorised to make an application to the Stock Exchanges where the Company’s share have been listed to deal in and for official quotation for the equity shares of Rs.5/- each of the Company and to do all such other things, matters and deeds and to comply with such other formalities and requirements as are directed by the said Stock Exchange(s) in connection with the enlistment of sub-divided shares.
Draft AGM/EGM Resolution:
SUBDIVISION OF EQUITY SHARES.
RESOLVED that pursuant to the provisions of Section 94 and other applicable provisions, if any, of the Companies Act, 1956 and the provisions of Article _ of the Articles of Association of the Company and subject to the approvals, consents, permissions and sanctions as may be necessary from the appropriate authorities or bodies, each of the _______equity shares of the face value of Rs.10/- each in the authorised share capital of the Company be sub-divided into _______ equity shares of Rs. __/- each and Clause V of the Memorandum of Association and Article __of the Articles of Association of the Company be altered accordingly.
//CERTIFIED TRUE COPY//
Explanatory Statement:
*POSTAL BALLOT: CALENDER OF EVENTS AND TIMELINE
S.NO
EVENTS
DATE
1.
Date of Board meeting to consider the issue and Appointment of Scrutinizer authorizing one of the functional Directors and Secretary to be responsible for the entire poll process.
X
2.
Date on which consent to be obtained from the scrutinizer to act as such.
X+1
3.
Date of despatch of Postal ballot Form along with necessary enclosures.
X+5
4.
Date of Completion of dispatch of notice along with Postal Ballot.
X+5
5.
Filing of calendar of activities and other related documents (Form 61) with ROC
X+6
6
Date of publication of notice in Newspaper (Both English & Tamil)
X+6
7.
Last date for receiving Postal Ballot by scrutinizer.
X+40
8.
Date of returning of ballot papers/register required to the maintained by the scrutinizer under rule 5(e) of the Companies (Passing of the Resolutions by Postal Ballot) Rules, 2001 and other related papers to the chairman by the scrutinizer.
X+42
10.
Date of announcement of results at the Registered office and publication of the same in the newspaper
X+43
11.
Date of signing of Minutes Book by the Chairman in which the results of postal ballot is recorded.
X+43
Compliances under The Companies Act, 1956
Sections
Activities
Compliance due date
TO WHOM TO BE SUBMITTED
159
Filing of Annual return by company having a share capital
Form 20B
Within 60 days from the day of AGM.
Registrar of Companies
220
Filing of Balance-sheet and the profit and loss account
Form 23 AC, Form 23ACA
Within 30 days from the day of AGM (held or should have been held).
Registrar of Companies
193
Minutes of proceedings of general meetings and of Board and other meetings
Within 30 days of the conclusion of every such meeting
-
125
Registration of Creation of charges
Form 8
Within a period of 30 days after the date of its creation
(upto 300 days from the date of the event with levy of additional fee U/S 611(2))
Registrar of Companies
135
Company to report modification of charges
Form 8
Within a period of 30 days after the date of its modification
(upto 300 days from the date of the event with levy of additional fee U/S 611(2))
Registrar of Companies
138
Company to report satisfaction of charges
Form 17
Within a period of 30 days after the date of its modification
(upto 300 days from the date of the event with levy of additional fee U/S 611(2))
Registrar of Companies
191
Registration of certain resolutions and agreements
Within a period of 30 days from the date of passing of such resolution.
Form 23
Registrar of Companies
All other are event Based
Section 349- Determination of Net Profit
1) In computing the net profits of a company in any financial year—
(a) credit shall be given tor 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 shall not be given for the following sums :—
(a) profits, by way of premium, on shares or debentures of the company, which are issued or sold by the company ;
(b) profits on sales by the company of forfeited shares ;
(c) profits of a capital nature including profits from the sale 2 of the undertaking or any of the undertakings of the company or of any part thereof;
(d) profits from the sale of any immovable property or fixed assets of a capital nature comprised in the undertaking or any of the undertakings of the company, unless the business of the company consists, whether wholly or partly, of buying and selling any such property or assets:
3 [ Provided that where the amount for which any fixed asset is sold exceeds the written down value thereof referred to in section 350, credit shall be given for so much of the excess as is not higher than the difference between the original cost of that fixed assets and its written down value ] 3
(4) In making the computation aforesaid, the following sums shall be deducted:—
(a) all the usual working charges ;
(b) directors' remuneration;
(c) bonus or commission paid or payable to any member of the company's staff, or to any engineer, technician or person employed or engaged by the company, whether on a whole-time or on a part-time basis;
(d) any tax notified by the Central Government as being in the nature of a tax on excess or abnormal profits:
(e) any tax on business profits imposed for special reasons or in special circumstances and notified by the Central Government in this behalf ;
(f) interest on debentures issued by the company ;
(g) interest on mortgages executed by the company and on loans and advances secured by a charge on its fixed or floating assets :
(h) interest on unsecured loans and advances ;
(i) expenses on repairs, whether to immovable or to movable property, provided the repairs are not of a capital nature:
(j) outgoings inclusive of contributions made under clause (e) of sub-section (1) of section 293 ;
(k) depreciation to the extent specified in section 350 ;
(l) the excess of expenditure over income, which had arisen in computing the net profits in accordance with this section in any year which begins at or after the commencement of this Act, in so far as such excess has not been deducted in any subsequent year preceding the year in respect of which the net profits have to be ascertained ;
(m) any compensation or damages to be paid in virtue of any legal liability, including a liability arising from a breach of contract;
(n) any sum paid by way of insurance against the risk of meeting any liability such as is referred to in clause (m);
(o) debts considered bad and written off or adjusted during the year of account
(p) amount paid as cess under section 441A.
(5) In making the computation aforesaid, the following sums shall not be deducted:—
(b) income-tax and super tax payable by the company under the Indian Income-tax Act, 1922 ( 11 of 1922 ) 5 , or any other tax on the income of the company not falling under clauses (d) and (e) of sub-section (4);
(c) any compensation, damages or payments made voluntarily, that is to say, otherwise than in virtue of a liability such as is referred to in clause (m) of sub-section (4) ;
(d) loss of a capital nature including loss on sale of the undertaking or any of the undertakings of the company or of any part thereof not including any excess referred to in the proviso to section 350 of the written down value of any asset which is sold, discarded, demolished or destroyed over its sale proceeds or its scrap value.
Section 350-Ascertainment of Depriciation
The amount of depreciation to be deducted in pursuance of clause (k) of sub-section (4) of section 349 shall be 1 [ the amount of depreciation on assets ] 1 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 2 [ 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.
The following check list can help you and kindly go through the same
CHECKLIST
The Companies Act contains the following procedure for the conversion of public company into private company:-
Convene a Board meeting for consideration of the proposal of conversion of the company into a private company.
Prepare the proposal for alteration of Articles of Association or prepare a new set of Articles of Association meeting the requirements of a private limited company.
Hold the Board meeting and get approval of the Board for the proposal, fix up the day, date and time of holding the general meeting of the company, approve notice and explanatory statement and authority to sign notice.
Hold the general meeting on the fixed day and pass the special resolution.
Fill e-Form 23 with the copy of special resolution, explanatory statement and Memorandum and Articles (before and after alteration).
Pay the requisite application fee.
Publish a newspaper notice in two widely circulated dailies of the State where the Regd. Office of the company is situated.
Get a no objection letter from major unsecured creditors and all secured creditors.
Apply to the Central Government in e-Form 1B.
Documents to be attached with the application (e-FORM 1B) are:-
Notice of extra-ordinary general meeting.
Minutes of extra-ordinary general meeting.
Copy of special resolution.
Copy of newspaper advertisement.
Affidavit that the company is not listed on any stock exchange.
Reference number, date of passing and date of filing the e-Form 23.
Payment of requisite application fee.
One copies each of the annual reports for the last three financial years.
Copy of the last annual return.
Altered Memorandum and Articles of Association.
No objection letters from major unsecured and all secured creditors supported by an Affidavit.
Reasons for conversion.
Terms of appointment of all managerial personnel.
Listed below complete procedure for issue of shares on rights basis in case of an unlisted company.
(1) Authorised share capital. Check that there is sufficient authorised share capital in the memorandum of association to accommodate the increase in the subscribed share capital that will arise due to the proposed rights issue. If the authorised share capital is inadequate, the memorandum of association must be amended to increase it by a suitable amount. If the articles also contain the authorised share capital, the articles also will have to be amended.
(2) Letter of Offer. Draft a Letter of Offer. As per section 81(1)(b), a 'notice' should make the offer of rights shares. This notice is called 'Letter of Offer'. (give atleast 15 days time to shareholders for exercising their option) It is a document sent to the shareholders of a company offering them shares in a rights issue. No form has been prescribed of the Letter of Offer. It should contain the following information:
(a)
Brief history of the company;
(b)
Nature of business carried on by the company;
(c)
Highlights of the financial performance for 3 to 5 years;
(d)
Management perception about the future prospects of the company;
(e)
Particulars of directors, including managing and whole-time directors;
(f)
Details of the proposed rights issue;
(g)
The number of shares held by a shareholder and the number of rights shares;
(h)
Terms and conditions of the present issue and mode of payment.
(3) Board's Approval. Convene a Board meeting and pass the following resolutions:
(a)
To approve the proposal of issuing new shares on rights basis and decide the price, total number of shares to be offered, proportion in which the rights shares will be offered, etc;
(b)
To approve a draft Letter of Offer;
(c)
To fix a date as a record date (or dates of closure of the Register of Members) for drawing up a list of members eligible to receive the offer;
(d)
To approve a draft application form (for subscribing to the rights shares, additional shares, splitting the rights renunciation);
(e)
To authorize Company Secretary or other officer to send the Letter of Offer to the members and to do such acts, deeds and things as may be necessary to give effect to the Board's decision;
(f)
To convene a general meeting for passing necessary resolutions, if any; to fix date, time and place of the general meeting and to authorize the Company Secretary or other officer to issue notice of the meeting.[73]
(4) General meeting. A general meeting will be convened to pass necessary ordinary/special resolution, if the articles require a resolution. Ensure that the explanatory statement annexed to the notice of the meeting fully explains the objects and reasons for the rights issue and justification therefore.
(5) Filing of resolution. The special resolution passed at the general meeting will be filed with the Registrar of Companies. If a resolution for increasing the authorized share capital has been passed, requisite registration fee will be paid at the Registrar's office.
(6) Record Date/Book Closure. Announce a record date/book closure as decided by the Board of directors well in advance allowing at least 2 to 3 weeks for lodgement of share transfer forms so as to exercise the right to take the rights shares. The closure of the Register of Members should be in accordance with the provisions of section 154 of the Companies Act.
(7) Drawing up list of members. After the record date/book closure is over, draw up a list of members to ascertain members eligible to subscribe to the rights shares.
(8) Despatching Letter of Offer. Despatch the Letter of Offer to the members eligible to subscribe to the rights issue as per the list of members drawn up. The Letter of Offer should be accompanied by application form for subscription, splitting, renunciation, etc. The Letter of Offer should be sent to the shareholders in such a manner that they get at least 15 days time to apply.
(9) Collection and scrutiny of application forms. Within a week after the last date for making the application, collect the application forms received and scrutinize them in all respects. Sort the valid applications and defective applications. Prepare a statement of allottees with all relevant particulars.
(10) Allotment. Convene a meeting of the Board/Allotment Committee and pass a resolution for allotment and file Return of Allotment with the Registrar of Companies.
(11) Allotment Letter/Share Certificates. Prepare and despatch Letters of Allotment. Alternatively, prepare and despatch Share Certificates to the allottees. In any case, Share Certificates should be despatched within 3 months from the date of allotment [113]
(12) Regret Letters/Refund Orders. Simultaneously, prepare and despatch regret letters and refund orders to the applicants to whom no shares have been allotted.
(13) Entry in the Register of Members. Immediately after the allotment, enter the particulars of the allottees in the Register of Members.
Date:
To
Mr……….
SUBJECT: RIGHT ISSUE OF ……… EQUITY SHARES OF RS.10/- EACH AGGREGATING TO RS. ………. ON RIGHT BASIS
Keeping in view the expansion and growth, the Company intends to raise the required funds by way of induction of the fresh Equity Share Capital of the Company. Henceforth, in view of the business plan and regulatory compliance, Board of Directors passed a resolution at its meeting held on ….2008 and the shareholders at the Extra-Ordinary General Meeting held on ……….. approving the aforesaid Right issue of Rs. …./-
…… Equity Shares of Rs.10/- each at par are being offered for subscription to the Equity shareholders on right basis in proportion to their present shareholding in existing paid up capital of the Company, subject to rounding off. These shares are being offered to those shareholders whose name appears in Register of Members of the Company on ……. being the Record Date fixed by the Board of Directors. The issue shall remain open for a period on .. days commencing from …… to .., till the close of working hours.
As your name appears in the Register of Members on the aforesaid Record Date, you are therefore entitled for ….. equity shares of Rs.10/- aggregating to an amount of Rs. ……../- under this right offer. You may kindly accept and apply for the aforesaid equity shares hereby offered to you by filling the application form and submitting the same along with full amount on or before the close of business hours on……...
As per the provisions of Section 81(1) of the Companies Act, 1956, you have also right to renounce your entitlement of the equity shares in part or full in favour of one or more person(s) as per your discretion. You may also apply for additional equity shares over and above the number of equity shares to which you are entitled to, provided allotment of additional equity shares will be considered for unsubscribed portion, if any, as per discretion of the Board of Directors of the Company.
Further, unsubscribed portion of the above rights issue, if any or any fraction thereof shall be disposed off as per discretion of the Board of Directors of the Company as deem fit in the best interest of the Company.
Thanking You
For & on behalf of the Board
For …………………… Limited
…..
Director
Encl:
1. Share Application form
2. Letter of offer
1. Shifting of Registered Office from one State to another State.
Shifting of registered office from one state to another involves amendment in memorandum of association
and filing of petition with the Company Law Board (CLB).
The company can amend the Domicile Clause of the Memorandum of Association for any of the following reasons
:-
1.to carry on it’s business more economically and more efficiently;
2.to attain it’s main objects by new or improved means;
3.to enlarge or change the local area of it’s operation;
4.to carry on some business which under existing circumstances may conveniently or advantageously be combined
with the business of the company;
5.to restrict or abandon any of the objects specified in the Memorandum;
6.to sell or dispose of the whole or of the undertaking any part of the undertakings ,of the company ;or
7.to amalgamate with any other company or body of persons.
The steps involved in changing the registered office from one state to another state are as follows :-
1. Call for a board meeting to decide on the change in the domicile clause.
2. In the board meeting fix up the date, time, place of the general meeting and approve the notices for this
purpose, send the notices , hold the meeting and pass special resolutions.
3. After taking the approval of the members, file a certified copy of the special resolution along with the
explanatory statement in Form 23 with ROC.
4. Publish a general notice in at least one regional language newspaper and one English language newspaper
circulated in the area in which registered office of the company is situated clearly stating the substance of
the petition.
5. Send individual notices to all creditors/debentureholders of the company.
6. After a gap of one month from the date of sending notices as above, file petition with the Company Law
Board (CLB) pursuant to the CLB Regulations ,1991. The petition has to be filed with the Regional Bench
of the CLB at which the existing registered office is situated.
MVCO Domain
7. Serve a copy of the petition on the ROC.
8. Serve a copy of the notice along with a petition to the Chief Secretary to the Government of the State
where the registered office of the company is situated or to the Administrator/Lt. Governor of the Union
Territory where the registered office is situated in the Union Territory.
9. A hearing may take place at the CLB office at which creditors, if any, and the representatives of the
company are heard before making any order.
10. After receiving the CLB order for shifting the registered office, the company is required to file certified
copy of the order with the ROC alongwith Form No. 21 within 3 months of receipt of certified copy along
with the printed copy of the memorandum of association .
11. A certified copy of the order from the ROC within one month of the date of filing must be obtained.
12. The certified copy of the order should be filed with the ROC of the new state within one month of the date
of the filing along with the certified copy of the memorandum of association.
13. The ROC of the new state i.e. at which registered office will be shifted will issue a fresh certificate of
incorporation which will be conclusive evidence of the shift of registered office.
14. File Form No. 18 with the new ROC for the situation of the registered office
15. Necessary changes are required to be made in the letter heads ,books, records etc. of the company.
16. Arrange to adopt new common seal of the company.
No comments:
Post a Comment