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									THE COMPANIES BILL, 2009


 Presentation on the salient features
             Of new Bill
        September 26, 2009


                                    1
   MANAGEMENT
       AND
  ADMINISTRATION
(Notice, AGM, Boards’ Report,
       Annual Return)




                                2
Section 78 - Register of Members, etc.

 Registers to be kept and maintained by
  every company :
   • Register of members containing details of
     both equity and preference shares held
     by each member – residing in India and
     outside
   • Register of debenture holders
   • Register of other security holders
 Registers to be in such form and manner as
  may be prescribed
                                             3
Section 78 - Register of Members, etc. (Cont…)


  Index of members and debenture-holders to
   be part of the Registers

  Foreign Register - If authorized by articles,
   a part of the above registers, containing
   names and particulars of members,
   debenture holders, other security holders
   and beneficial owners residing outside India
   can be maintained in any country outside
   India
                                               4
Section 78 - Register of Members, etc. (Cont…)

Particulars of the place where the
 Register of members, Register of
 debenture holders, Register of other
 security holders and foreign registers
 is kept and the fact of change or
 discontinuance of the same shall be
 filed with the Registrar within thirty
 days (this is presently required only
 for foreign registers)

                                                 5
Section 81 - Power to close Register of
             Members, etc.

A company may after giving seven
 days notice close the Register of
 Members, Register of debenture
 holders or Register of other security
 holders

The extant provision of section 154
 provides only for Register of members
 and Register of debenture holders

                                      6
Section 82 - Annual Return


Number of new requirements
 introduced

Annual Return to contain particulars
 as they stood on the close of the
 financial year (Presently particulars
 as on date of AGM required)



                                     7
Section 82 - Annual Return (Cont…)

  Following additional information shall be
   required :

      Principal business activities of the company

      Particulars of the holding company, subsidiary
       and associate companies

      Particulars of other securities (other than shares
       and debentures)

                                                        8
Section 82 - Annual Return (Cont…)


   Particulars of members and debenture
   holders along with changes therein since
   the close of the last financial year (Once
   in 5 years provision deleted)

   Particularsof promoters, directors and
   key managerial personnel along with
   changes therein since the close of the last
   financial year (particulars of directors,
   manager and company secretary required
   presently)

                                             9
Section 82 - Annual Return (Cont…)


     Meetings of members or a class of
      members,    Board    and    its  various
      committees along with attendance details

     Remuneration of directors     and   key
      managerial personnel

     Penalties imposed on the company, its
      directors or officers and details of
      compounding of offences

                                            10
Section 82 - Annual Return (Cont…)


 • Matters related to certification          of
   compliances, disclosures

    Such other matters as may be prescribed
     (leaving flexibility for the Government to
     add on to the list of information already
     provided)



                                             11
Section 82 - Annual Return (Cont…)


 Annual Return to be signed by a director
  and company secretary and where there is
  no company secretary, by a company
  secretary in practice (No requirement for
  managing director to sign)

 In case of OPC and Small Company, annual
  return to be signed by the Company
  Secretary and where there is no Company
  Secretary, by one director of the company

                                         12
Section 82 - Annual Return (Cont…)


 In case of a listed company and/or a
  company having such paid up share capital
  and turnover as may be prescribed, the
  annual return shall also be signed by a
  company secretary in whole time practice
  certifying that the annual return states the
  facts correctly and adequately and the
  company has complied with all the
  provisions of the Act (very high
  responsibility cast on PCS)


                                            13
Section 82 - Annual Return (Cont…)
  Extract of Annual Return in prescribed form shall
   form part of Boards’ Report

  Annual return to be filed within 30 days from the
   date of AGM (presently 60 days)

  New penal provisions :

       Company punishable with fine

       Officer in default is punishable with
        imprisonment (new) or fine or with both

       PCS punishable with fine

                                                       14
Section 83 - Place of keeping and inspection
             of registers, returns etc. (Cont…)


  Registers and Returns to be kept at registered
   office

  With approval of shareholders by special
   resolution, they may also be kept at any other
   place in India in which more than 1/10th of the
   total members of the Company reside

    Copy of such proposed special resolution should be
     given to the Registrar in advance


                                                     15
Section 83 - Place of keeping and inspection
             of registers, returns etc. (Cont…)



 Registers,  Indices and copies of
  returns shall be open for inspection
  for members, debenture holders, other
  securities holder, or any beneficial
  owner and not to any other person
  as is presently allowed


                                            16
Section 85 - Annual General Meeting (AGM)

  First AGM to be held within nine months
   from the close of the first financial year
   (Present provision is that first annual
   general meeting shall be held within 18
   months from the date of incorporation)

  The first financial year of a company
   incorporated on or after the first day of
   January of any year shall be the 31st day of
   March of the following year. (Hence a period
   of more than 18 months is available for first
   AGM)

                                              17
Section 85 - Annual General Meeting (AGM) (Cont…)


 Subsequent AGM shall be held within 6 months
  from the close of the financial year and not more
  than 15 months gap between two AGM’s

 OPC need not hold AGM

 AGM can now be held on a public holiday, but not
  a National Holiday

 The business hours during which AGM to be held
  is now specified as between 9.00 a.m. and 6.00
  p.m.

                                                 18
Section 89 - Calling of Extraordinary General Meeting



   Meeting of members called by the Board on
    its own shall also be now considered as an
    extraordinary general meeting (presently
    called general meeting)




                                                   19
Section 90 - Notice of general meeting

   Notice for general meeting – Not less than
    21 clear days

   Notice of every meeting of the company - To
    be given to every director of the company

   Notice to be given to every member of the
    company      (member      now   includes
    preference shareholder)

   Notice may be given in electronic mode; if
    sent by post it shall be registered post
                                             20
Section 91- Explanatory Statement to be
            annexed to Notice
 Additional Information required to be disclosed in
  the statement of special business :

     Nature of concern or interest, if any, of every key
      managerial personnel in addition to every
      director and manager for items to be transacted
      at a meeting
     Extent of shareholding of every director,
      manager or other key managerial personnel
      holding more than 2 % of the paid up share
      capital in any other company, if the special
      business includes any item to be transacted at
      the meeting relates to or affects such other
      company. As per the extant provisions the limit
      is 20 %.
                                                       21
Section 91- Explanatory Statement to be
            annexed to Notice (Cont…)


      Any benefit accruing to any director,
       manager, key managerial persons or his
       relatives as a result of non-disclosure or
       insufficient disclosure shall be held in
       trust for the company and shall be
       compensated to the company

      Default in compliance could result in a
       fine of 5 times the amount of the benefit
       accruing
                                               22
Section 91- Explanatory Statement to be
            annexed to Notice (Cont…)


   Relative defined as the spouse,
    brother,   sister  and   all  lineal
    ascendants and descendants of such
    individual related to him either by
    marriage or adoption.

 Lineal    ascendants or descendants
    should only include blood relatives –
    in direct line – For eg. – children,
    grand children, parent, grand parents
                                          23
Section 92 - Quorum for Meetings
   Meetings called by requisitionists shall stand
    cancelled for lack of quorum

   Any other meeting shall stand adjourned to the
    same day, same time and same place in the next
    week

   Such adjourned meeting shall require not less
    than 3 days notice

   Notice to be given     individually   or   by   press
    announcement

   At such adjourned meeting if quorum is not
    present within half an hour, members present shall
    be the quorum
                                                       24
Section 94 - Proxies

   Proxies can be in electronic mode


Section 97 - Voting

   Electronic mode of voting acceptable in
    such manner as may be prescribed




                                          25
Section 98 -Demand for Poll


   Limits for demanding poll enhanced from
    50,000 to 5,00,000 (Paid up)

   Chairman can appoint such number of
    persons as he deems necessary as
    scrutinisers (presently minimum two
    persons)


                                          26
Section 99 - Postal Ballot


 Ordinary business items and items in
 respect of which directors or auditors
 have a right to be heard cannot be
 taken by postal ballot

 Approval for merger can also be taken
 by postal ballot

                                      27
Section 100 - Circulation of Member’s
             Resolution
    No restriction on number of words to be
     contained in the statement to be circulated
     to the members upon requisition (presently
     restricted to 1000 words)

    Number of members who can requisition
     increased to 1/10th of the total paid up
     share capital or 1/10th of the total voting
     power (presently it is not less than 1/20th
     of the total voting power or 100 members
     holding not less than Rs. 1 lakh paid-up
     share capital)

                                              28
     Section 100 - Circulation of
    Member’s Resolution (Cont…)
 Central Government may direct the
 requisitionists to reimburse the cost
 incurred by the Company




                                         29
    Section 104 - Resolutions requiring
              special notice

   New provision to the effect that notice of
    intention to move such resolution shall be
    given by such number of persons as may be
    prescribed. (Presently even one person
    holding one share can give such notice)

   This would prevent frivolous notices




                                            30
Section 107 - Minutes

   Minutes of meetings of class of shareholders or
    creditors and every resolution passed by postal
    ballot to be kept

   Whether      minutes    of     meetings             of
    shareholders/creditors approving scheme             of
    arrangement/ amalgamation should be kept?

   All appointments of officers made at any of the
    meetings to be included in the minutes.- ‘Officer’ not
    defined

   Secretarial Standards as may be prescribed to be
    observed for Board and General Meetings
                                                       31
Section 109 - Report on general meeting

    New requirement

    Every listed company to prepare a report of
     each AGM confirming that the meeting was
     convened, held and conducted as per the
     provisions of the Act and the rules made
     thereunder

    Such report to be filed with RoC within 30
     days of the conclusion of AGM

                                              32
   DECLARATION
       AND
PAYMENT OF DIVIDEND




                      33
Section 110 - Declaration of Dividend

   Transfer to reserves before declaring
    dividend now optional

   Even in case of inadequacy or absence in
    profits in any financial year – dividend can
    be declared
    • with unanimous consent of all directors
    • approval of financial institutions whose term
      loans are subsisting
    • approval of shareholders by special resolution at
      AGM
    • Central Government approval no longer required

                                                      34
Section 110 - Declaration of Dividend (Cont…)


    Board may declare interim dividend during
     any financial year only out of the profits of
     the company for part of the year (Presently
     interim dividend can be declared out of
     accumulated profits kept in profit and loss
     account)

    No dividend can be declared by a company
     contravening the provisions relating to
     repayment of deposits

                                                35
Section 110 - Declaration of Dividend (Cont…)

  Transfer to IEPF required after 7 years
   from the date of transfer to unpaid
   dividend account (Date of declaration
   + 30 days + 7 days + 7 years)


  Dividend   warrant / ECS intimation
   will have to be sent by registered post


                                           36
Section 112 - IEPF
 Central Government to establish a separate IEPF subject to
  CAG Audit

 IEPF will also be credited with the following

      Unclaimed/Unpaid amount in the General
       Revenue Account of the Central Government -
       Extant section 205A transfers.

      Unclaimed/unpaid amount lying to the credit of
       IEPF under extant Section 205C

      Amount received for penalties imposed for
       disgorgement     of   securities  acquired   by
       impersonation     and    by    making   multiple
       applications in an IPO
                                                          37
Section 112 – IEPF (Cont..)


   Only unclaimed/unpaid dividend to be transferred
    to IEPF

   No reference to the following items presently
    required to be credited to IEPF

       Unclaimed matured debentures

       Unclaimed interest on debentures

       Unclaimed application money received on any
        securities

                                                  38
Section 112 – IEPF (Cont..)


   Any person claiming to be entitled to the
    dividend transferred to IEPF may apply to
    the authority prescribed

   The amount transferred to IEPF can be
    utilized for refund of unclaimed dividends,
    application money due for refunds and
    interest thereon




                                             39
BOARD’S REPORT




                 40
Section 120 - Board’s Report

   New requirements set out for Board’s
    Report to include –
    • Extract of the Annual Return in such
      form as may be prescribed
    • Number of Board Meetings held
    • Directors’ Responsibility Statement
    • Declaration by independent directors
      required to be appointed for listed
      companies and other public companies
      as may be prescribed
                                         41
Section 120 – Board’s Report (Cont..)


   • Report of the Remuneration Committee of
     directors
   • Explanations or comments by the Board on
     every qualification, reservation or adverse
     remark made by the auditor in his report
   • Particulars of loans, guarantees or
     investments exceeding the prescribed limits
     and has been approved by shareholders by a
     special resolution
   • Particulars of contracts or arrangements
     (related party contracts)

                                              42
Section 120 – Board’s Report (Cont..)

   In case of a listed company, the Directors’
    Responsibility Statement, shall also state that ‘the
    directors had laid down internal financial controls
    to be followed by the company and that such
    internal financial controls have been complied with’

    The statement should be reworded to confirm the
    adequacy or otherwise of the internal financial
    controls and their operating effectiveness.




                                                      43
Section 120 – Board’s Report (Cont..)

   The following information presently being provided
    in / along with the Board’s Report would not be
    required :
     • Information on the state of company’s affairs
     • Details of amounts proposed to be transferred to
       reserves (probably because the requirement to
       transfer to reserves before declaring dividend is
       done away with)
     • Amount recommended for dividend
     • Material changes and commitments which have
       occurred between the end of the financial year
       and the date of report affecting the financial
       position of the company


                                                      44
Section 120 – Board’s Report (Cont..)


   • Particulars relating to conservation of
     energy, technology, absorption, foreign
     exchange earnings and outgo

   • Particulars  of   employees   drawing
     remuneration in excess of a prescribed
     limit

   • Reasons for failure to complete     the
     buyback within stipulated time


                                          45
Section 120 – Board’s Report (Cont..)

   Board’s Report and any annexures thereto
    shall be signed by its Chairman, if he is
    authorised by the Board or shall be signed
    by at least two directors, one of whom shall
    be a managing director

   In case of OPC the Report shall be signed
    by one director

   Board’s Report along with the financial
    statements and notice for the AGM should
    be sent to members by registered post or by
    such electronic mode as may be prescribed
                                               46
REGISTERED VALUERS




                     47
Sections 218 to 223 - Registered Valuers

   New concept

   Valuation of any property, stocks, shares,
    debentures, securities, goodwill, net worth or
    assets of a company required under the Act,
    shall be carried by a registered valuer

   Registered valuer to be appointed by the
    Audit Committee or in its absence by the
    Board of Directors


                                               48
Sections 218 to 223 - Registered Valuers (Cont..)


    Valuer should be       registered   with   the
     Central Government

    Persons qualified to be registered as
     valuers:
       Chartered Accountant

       Cost and Works Accountant

       Company Secretary

       Any    other person possessing such
        qualifications as may be prescribed

                                                    49
Sections 218 to 223 - Registered Valuers (Cont..)



   Company and body corporate not eligible to
    apply for being registered as valuer

   Central Government to maintain a Register
    of Valuers which shall contain the names
    and addresses of persons registered as
    valuer



                                                    50
Sections 218 to 223 - Registered Valuers (Cont..)


   Central Government to have the power to
    remove and restore the names of valuers
    from the Register

   Central    Government    to    review   the
    performance of the registered valuers once
    in 3 years and may remove the name of any
    person from the Register of Valuers if it
    thinks that the performance of the valuer is
    such that its name should not remain on
    the Register of Valuers
                                                    51
     Sections 218 to 223 - Registered
             Valuers (Cont..)
   No person either alone or as a partner of
    another person, can practice, describe or
    project himself as a registered valuer or
    permit himself to be so described or
    projected, unless he or all his partners are
    registered under the Act

   Rates to be charged by Registered valuer
    not to exceed prescribed rates

                                              52
COMPROMISES, ARRANGEMENTS
           AND
     AMALGAMATIONS




                            53
Section 201 - Power to compromise or make
 arrangements with creditors and members

    Provisions revamped to provide flexibility

    Proposals for corporate debt restructuring and
     /or takeover offers of companies other than
     listed companies also covered

    Takeover offer means offer to acquire all or part
     of shares of another company

    Takeover offer of listed companies to comply
     with SEBI guidelines

                                                    54
Section 201 - Power to compromise or make
 arrangements with creditors and members
                 (Cont…)
    Arrangements for reorganization of company’s
     share capital by consolidation or division of
     shares or both the methods, also included

    Reduction of share capital can be included in
     the scheme and specific provisions in section
     59 for reduction of capital shall not apply

    Authority to Tribunal to deal with such matter

    Time bound approval / deemed approval

                                                      55
Section 201 - Power to compromise or make
 arrangements with creditors and members
                 (Cont…)
    Notice can be by advertisement

    Persons who can object - to hold          10%
     shareholding or 5% outstanding debt

    Valuation report required

    Approval of majority representing three-fourths
     in value required (not number any longer)

    Approval may be sought by postal ballot
                                                  56
Section 201 - Power to compromise or make
 arrangements with creditors and members
                 (Cont…)
  The   Application to Tribunal       to   disclose   the
   following by an affidavit :

      all material facts relating to the company, such
       as the latest financial position of the company,
       the latest auditors’ report on the accounts of the
       company and the pendency of any investigation
       or proceedings against the company

      Reduction of share capital of the company, if
       any, included in the scheme

                                                        57
Section 201 - Power to compromise or make
 arrangements with creditors and members
                 (Cont…)
    In case of a scheme of Corporate Debt
     Restructuring (CDR) with approval of 75% of
     secured creditors in value:

        A creditor’s responsibility statement

        Safeguards for the protection of other secured
         and unsecured creditors

        Report by auditor that the fund requirements of
         the company after the CDR will conform to the
         liquidity test based on estimates provided by the
         Board

                                                        58
Section 201 - Power to compromise or make
 arrangements with creditors and members
                 (Cont…)

        Where CDR is as per RBI guidelines, a statement
         to that effect

        A valuation report in respect of the shares and
         the property and all assets, tangible and
         intangible,   movable    and   immovable,    by
         registered valuer

    Tribunal may order for a meeting to be held for the
     purpose of considering the compromise or
     arrangement

                                                      59
Section 201 - Power to compromise or make
 arrangements with creditors and members
                 (Cont…)
   The notice for the meeting can be served either
    individually or by an advertisement, along with a
    statement disclosing :
    • The details of the scheme
       The valuation report, if any
       The effects thereof the creditors, members
        and debenture holders
       The effect of the scheme on any material
        interests of the directors of the company or
        the debenture trustees
       Such other matters as may be prescribed

                                                   60
Section 201 - Power to compromise or make
 arrangements with creditors and members
                 (Cont…)
    If an advertisement is issued it should indicate the
     time when the copies of the scheme will be
     available to concerned persons free of charge from
     the registered office of the company

    Notice to also provide that written consent for the
     scheme can be sent by the persons within one
     month from the date of receipt of the notice

    Objection can be made only by persons holding
     not less than 10% of the shareholding or having
     not less than 5% outstanding debt as per latest
     audited financial statement


                                                       61
Section 201 - Power to compromise or make
 arrangements with creditors and members
                 (Cont…)
   Notice along with all the accompanying documents should
    also be sent to:

       Central Government
       RBI
       SEBI
       Registrar
       respective stock exchanges
       Official Liquidator
       Competition Commission of India
       Such authorities who may require to represent in the
        matter

   The above authorities to make representations within one
    month from the date of receipt of such notice, else deemed to
    be approved

                                                               62
Section 201 - Power to compromise or make
 arrangements with creditors and members
                 (Cont…)
    The order of Tribunal shall also provide for the
     following :
      • Conversion of preference shares into equity
        shares – with option to receive arrears of
        dividend in cash or equity shares
      • Protection of any class of creditors
      • If scheme is agreed by creditors, any
        proceedings pending before BIFR shall abate
      • Variation of shareholders’ rights in compliance
        with applicable provisions of the Act


                                                     63
Section 203 – Merger and Amalgamation
              of companies

   Provides for both merger and demerger
    (division of undertaking)

   Merging companies –

    • for a merger by absorption means both transferor
      and transferee companies and

    • for a merger by formation of a new company, the
      transferor companies

                                                        64
Section 203 – Merger and Amalgamation
             of companies (Cont…)

  Where a meeting is required to be held pursuant to
   the Order of the Tribunal, the following documents
   / information shall be circulated :

   • Draft scheme approved by the Board of the
     merging company

   • Confirmation that a copy of the draft scheme
     has been filed with the Registrar




                                                   65
Section 203 – Merger and Amalgamation
             of companies (Cont…)
   • Report adopted by the directors of the merging
     companies explaining the effect of the
     compromise on each class of shareholders, the
     share exchange ratio and specifying valuation
     difficulties, if any

   • Report of expert with regard to valuation, if any

   • Supplementary accounting statement if the last
     annual accounts of any of the merging company
     relate to a financial year ending more than six
     months before the first meeting of the company
     summoned for approving the scheme
                                                         66
Section 203 – Merger and Amalgamation
             of companies (Cont…)
  In case of a merger by formation of a new company,
   in addition to all the above, copy of the ordinary
   resolution approving the draft scheme, passed by
   each of the transferor companies would be required
   to be circulated
  The order of the Tribunal approving the
   arrangement shall also include:
     Foreign direct investment if any, to be allocated
      to the transferor and transferee company
     Transfer of employees of the transferor company
      to the transferee company



                                                     67
Section 203 – Merger and Amalgamation
             of companies (Cont…)

      Where the transferor is a listed company and
       the transferee is an unlisted company –

          the transferee company shall continue to be
           an unlisted company (not favourable in case
           of a demerger)

          shareholders of transferor company desiring to
           opt out of the transferee company should be
           paid at a pre-determined price or as per
           valuation made and as provided by the
           Tribunal


                                                      68
Section 203 – Merger and Amalgamation
             of companies (Cont…)

          thetransferor company if not dissolved, will
          become an unlisted company and its
          shareholders if desiring to opt out should also
          be paid at a pre-determined price or as per
          valuation
     • Where transferor company is dissolved, the fee
       for authorized capital can be set-off against the
       fees payable by the transferee company

    Certified copy of the order to be filed with Registrar
     within 30 days of making the order



                                                         69
Section 204 – M & A of small companies,
              Holding and WOS

    Simplified process and easy time lines for mergers
     and amalgamations of small companies and
     holding company and wholly owned subsidiary

    Small company – paid up share capital less than
     Rs 5 crore and turnover not over Rs. 20 crore as
     per latest audited profit and loss account; not a
     holding or subsidiary; not a charitable company;
     not formed under any Special Act




                                                     70
Section 204 – M & A of small companies,
              Wholly and WOS (Cont…)

 Notice of scheme inviting objections from
  any persons affected by the scheme
  within 30 days, to be issued both by
  transferor and transferee company
 Objections   received, if any,     to be
  considered in respective general meetings
  and scheme to be approved by a special
  resolution



                                          71
Section 204 – M & A of small companies,
              Wholly and WOS (Cont…)

  In case of creditors meeting –
    • notice of 21 days
    • Scheme to be approved by three-fourths
      in value of creditors or class of creditors
      at a meeting
    • or by approval in writing
  Transferee company to file copy of the
   approved scheme with ROC and Official
   Liquidator (OL)

                                               72
Section 204 – M & A of small companies,
              Wholly and WOS (Cont…)

    If ROC and OL have no objections, the scheme
     shall be registered and confirmation given

    If OL does not communicate his objections within
     30 days – no objection presumed and Registrar can
     register and confirm

    Upon objection from OL or any other person,
     Registrar may apply to Tribunal within 90 days of
     receipt of the scheme and Tribunal may issue
     necessary directions

                                                    73
Section 204 – M & A of small companies,
              Wholly and WOS (Cont…)
    If no comments or objection is received from the
     Registrar or any other person, the Tribunal may
     pass an order confirming the scheme

    The Registrar shall register the scheme and issue
     confirmation to the companies

    Registration of the scheme shall be deemed to have
     the effect of dissolution of the transferor company
     without winding up

    Transferee company can avail set-off of fees
     payable on authorized capital

                                                      74
Section 205 - Amalgamation by
              mutual agreement
   New concept to facilitate cross border
    mergers

   In case of a foreign company merging with
    an Indian company, the scheme may
    provide for payment of consideration to the
    shareholders of the merging company in
    cash or in Indian Depositary Receipts or
    partly in cash and partly in Indian
    Depositary Receipts

                                             75
 Section 205 - Amalgamation by
               mutual agreement
 IndianDepositary Receipts means any
 instrument in the form of a depositary
 receipt created by a domestic
 depositary in India and authorized by
 a company incorporated outside India
 making an issue of such depositary
 receipts



                                      76
Section 207 - Purchase of minority
                shareholding

    Where any acquirer or a person acting in
     concert with such acquirer, becomes a
     registered holder of 90% or more of the
     issued equity share capital of a company
     or any person or group of persons becoming
     90% majority or holds 90% of the issued
     equity share capital by virtue of a merger,
     amalgamation, share exchange, conversion
     of securities or for any other reason,
     such acquirer, person or group of persons,
     shall make an offer to the remaining
     shareholders to buy their shares.
                                              77
Section 207 - Purchase of minority
              shareholding (Cont…)
  The   minority shareholders may on
   their own make an offer to the
   majority shareholders to purchase
   their shares.
  Offer price shall be as determined by a
   registered valuer




                                        78
 Section 207 - Purchase of minority
               shareholding (Cont…)
 The  majority shareholders shall
  deposit required amount in a separate
  bank account to be operated by
  transferor company
 Transferor company responsible to
  receive shares and to make payment
  to shareholders within 60 days


                                      79
Section 207 - Purchase of minority
             shareholding (Cont…)
  In the absence of physical delivery of shares
   by shareholders within specified time, the
   share certificates shall be deemed to be
   cancelled and payment made
  In case of an offer for full purchase by a
   majority shareholder the heirs, successors
   etc, of the minority shareholder can avail
   the amount up to three years from the date
   of acquisition of majority shareholding


                                              80
Section 207 - Purchase of minority
              shareholding (Cont…)
  Minority shareholders entitled to receive on
   pro rata basis such higher price, at which
   the majority shareholders holding at least
   75% of the minority shareholding, have
   negotiated or have an understanding with
   any other person for transfer of the said
   shares.
  ‘Acquirer’ and ‘persons acting in concert’ to
   have same meaning as in SEBI Takeover
   Regulations

                                              81
Section 209 - Registration of offer of schemes
              involving transfer of shares

  Circular containing an offer of a scheme or
   contract involving transfer of shares or any
   class of shares, shall be presented to the
   Registrar for registration and shall not be
   issued unless registered
  Registrar to communicate refusal to register
   within 30 days of application




                                             82
Section 211 - Liability of officers in respect
             of offences committed prior
            to amalgamation, transfer, etc.


   Liability in respect of offences committed
    under the Act by officers in default of the
    transferor company prior to its merger,
    amalgamation or acquisition will continue
    after such merger, amalgamation or
    acquisition



                                                  83
SPECIAL COURTS




                 84
Sections 396 to 405 - Special Courts
   New concept

   Central Government to establish special
    courts for the purpose of providing speedy
    trial of offences under the Act.

   Special Courts situated in the area where
    the registered office of the company is
    situated to have jurisdiction and if there are
    more than one Special Courts in an area,
    the one specified by the High Court
    concerned will have jurisdiction
                                                85
Sections 396 to 405 - Special Courts (Cont..)

    All offences under Companies Act to be
     triable only by Special Courts

    Every offence under the Act shall be
     deemed to be non-cognizable

    Special Court may based upon a police
     report of the facts constituting an offence or
     upon a complaint made, take cognizance of
     the offence without the accused being
     committed for trial
                                                 86
Sections 396 to 405 - Special Courts (Cont..)

    Extant provisions of section 621A relating
     to non-cognizable offences and provisions of
     section 621A relating to composition of
     offences have been retained

    Matters relating to accusation without
     reasonable cause shall now be dealt with by
     the Special Court or Court of Session in
     accordance with Section 250 of the Code of
     Criminal Procedure, 1973

                                               87
Sections 396 to 405 - Special Courts (Cont..)

   Special Courts may try in a Summary Way any
    offence under this Act which is punishable with
    imprisonment for a term not exceeding 3 years (like
    a civil suit) – in such cases punishment cannot
    exceed one year. If necessary the Special Court
    may try the matter as a regular trial

   Appeals shall lie with the High Court

   Transitional provisions that existing Court of
    Sessions will continue to exercise jurisdiction


                                                     88
NATIONAL COMPANY LAW TRIBUNAL
             (NCLT)
              AND
      APPELLATE TRIBUNAL




                            89
Sections 368 to 395 - NCLT and Appellate
                      Tribunal

 Provisions  relating to establishment,
  constitution and functioning of NCLT
  and Appellate Tribunal laid down
  elaborately




                                           90
Sections 368 to 395 - NCLT and Appellate
                      Tribunal (Cont…)
   Criteria/qualification/experience for Chairperson/
    members of Tribunal and Appellate Tribunal
    clearly set out

   Some matters presently dealt with by Company
    Law Board which shall be handled by the Tribunal

       Default in repayment of principal amount and
        interest thereon on Debentures

       Failure to repay deposits on time


                                                    91
Sections 368 to 395 - NCLT and Appellate
                      Tribunal (Cont…)
   Some matters presently requiring approval of
    Central Government to go to Tribunal :

       Alteration of articles for conversion of a public
        company into a private company

       power to call annual general meeting,

       refusal for transfer of securities,




                                                       92
Sections 368 to 395 - NCLT and Appellate
                      Tribunal (Cont…)

     to give notice in case of an
      application for reduction of share
      capital
     default in repayment of principal on
      debentures
     to decide on the financial year



                                           93
THANK YOU




            94

								
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