Friday, October 7, 2016

Difference between Section 42 and Section 62 of the Companies Act 2013

Section 42  provides  for  all  securities  whereas  section 62  is  deals  with  only Shares

As  per  Section 2 ( 81)   "securities" means the securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);

(h) “securities” include— (i) shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate;
[(ia) derivative
(ib) units or any other instrument issued by any collective investment scheme to the investors in such schemes;]
[(ic)security receipt as defined in clause (zg) of section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;]
 [(id) units or any other such instrument issued to the investors under any mutual fund scheme;]
(ii) Government securities; (iia) such other instruments as may be declared by the Central Government to be securities; and (iii) rights or interest in securities;

Private  placement  means any offer of securities or invitation to subscribe securities to a select group of persons
Wherease  Section 62  shares  can  be  offered  to  existing  or  new  persons  or  employees  or  conversion  of  debt  into  shares

Section 42  separate  bank  account to  be  opened  whereas  no  such  condition  exist  in  Section 62 

While  conversion of debt  into  shares  we  need  to take  care  Section 192    The  necessary  disclosure  has  to be given

The  penalty  clause  has  provided  in  Section 42  but no  such  clause  we  need  to refer  section 450  where  it  provides  that  Punishment where no specific penalty or punishment is provided

No comments:

Post a Comment

updates from Economic Times

MUMBAI: The government is planning a separate legislation for registered valuers who can help arrive at better valuation of bankrupt compan...