Synopsis-2-Din Sir-Corporate Law

Section-42 Book Closure
A company may on giving seven day’s notice by advertisement in the

newspapers close the register of members for any time not exceeding 45 days in
a year but not exceeding 30 days at a time.
SEC Notification:
Required notice period for Companies listed as Z category is 14 working days

Required notice period for Companies listed as other category is 7 working days
Shares and Share Capital:
Nominal, authorized, Registered capital

Issued
Subscribed
Paid-up
Reserve Capital:
A Company by a special resolution may declare that “uncalled capital” of the

Company shall not be capable of being called up except when the company is
wound up. This uncalled capital is called reserve capital of the company.
Difference between Shares and Stocks:
Point of Difference Shares Stocks
Un-equal
Nominal Value Equal
cannot be transferred in can be transferred in

Transfer
fragments fragments
Shares can be converted
May be partly paid into stocks only when
Paid up Value
fully paid
Shares are issued initially Cannot be issued initially
Issue
There is No Sl. No.
Serial Number There are Sl. numbers
Sec-53: Alteration of Share capital:
A company limited by shares if it is authorized by its articles may alter its share
capital by a special resolution as under:
1. Increasing of share capital:

Increasing of share capital by issuing new shares. If it is increased beyond
the registered capital, a notice of increasing is to be filed with the registrar
with in 15 days and fees to be paid accordingly.
2. Consolidation of share capital

Consolidate and divide all or any of its share capital into shares of larger
amount
3. Conversion:
Conversion of shares into stock or re-conversion of stock into sahrs
4. Sub-division of share capital:

Sub-division of share capital into shares of a smaller amount than is specified
in the memorandum
5. Cancellation of share capital
Cancel shares which at the date of passing special resolution have not been taken or agreed
to be taken by any person.
Diminish the share capital which is cancelled
Section-57: Application of Share Premium Account:
When shares are issued at a premium, the amount of premium is to be transferred to “ Share
premium Account” in the Balance Sheet. Share premium can be used as follows:
In paying up un-issued shares of the company to issued to the members as fully paid bonus
shares
For writing off preliminary expenses of the company
For writing off expenses, commission, discount on issue of shares or debenture
In providing for premium payable on the redemption of redeemable preference share

Section-59: Reduction of share capital
Subject to confirmation of the court, a company limited by shares, if so authorized by its articles
by passing a special resolution reduce its share capital as follows:
a) Extinguish or reduce the liability on any of its shares in respect of share capital
not paid-up
b) Writing off lost share capital
c) Paying off share capital which is in excess of the want of the company
Director:
General Meetings and Different type of resolutions: CA1994
Annual General Meeting

As per section 81(1) of the Companies Act 1994 every Company shall
hold one Annual General Meeting (AGM) of the Company in every
English calendar year. But the period from one AGM to next AGM shall
not exceed 15 months. Every company shall hold its first AGM after
incorporation within 18 months from the date of incorporation.
But as per SEC regulations the AGM is to be held within 6 months from
the end of its Accounting year.
For calling AGM notice to the shareholders is to be given at least for 14

days before, mentioning the date, time and venue of the meeting therein.
The annual report of the company is to be accompanied. The Agenda of
the meeting is to be mentioned in the notice.
Following businesses are generally transacted in the AGM

( Ordinary resolution)
1. Adoption of annual financial statements and auditors’ report thereon;

2. Declaration of Dividend;
3. Appointment of Auditors and to fix their remuneration;
4. Appointment of Director(s);
5. Any other matter with the permission of chair.
Extra ordinary general Meeting
As per Section-84, the above meeting can be called on requisition from

holders of 1/10th members or 1/10 holders of paid-up capital. If the
Directors do not cause a meeting to be called within twenty-one days
from the date of the requisition being so deposited, the requisitionists or a
majority of them in value may themselves call the meeting, but in either
case any meeting so called shall be held within three months from the
date from the deposit of the requisition. Notice for holing the meeting is to
be given at least for 21 days before the date of the meeting. The Agenda
of the meeting is to be mentioned in the notice.
(i) Ordinary resolution (ii) Special resolution (iii) Extra-ordinary resolution.
(i) Special resolution:
This is passed in a General meeting by the three-fourth majority of the

members present in person or by proxy. Notice for which 21 days
specifying the intention to propose the resolution is to be given before the
date of the meeting.
Special resolutions are necessary for the following purposes-(Sec-87):
i) To change the name of the Company;

ii) To alter the Memorandum of Association;
iii) To alter the Articles of Association;
iv) To enhance/reduce the share capital or its denomination;
v) To convert any portion of the capital, uncalled in to reserve capital;
vi) To appoint inspectors to investigate the company’s own affairs;
vii) For winding-up of a Company voluntarily.
Extra-ordinary resolution-(sec-87)
- For winding up the Company voluntarily to the effect that it cannot by

reason of liabilities continue its business and it is advisable to wind up.
- For removal of a Director before the expiration of his period
directorship
-
Section-90: Number of Director:
For a public limited Company and a Pvt. Limited Company which is a

subsidiary company of a public limited company must have at least 3
Directors
A private limited Company shall have at least 2 Directors
Section -91 Appointment of Directors:
a) The subscriber of memorandum shall be deemed to be the first Directors of

the Company;
b) The Directors are appointed by the shareholders in the General Meeting;
c) The existing Directors may appoint any person as Director in case of any
casual vacancy
One third of the Directors shall retire by rotation in each year.
Section- 94 Disqualification of Directors:
Following persons shall not be eligible for appointment as Director:
- An unsound mind, declared by a competent court;

- An insolvent or an un-discharged insolvent;
- Any person fails to pay his shares money after it is called up and 180 days are
elapsed;
- A minor;
- Any other person/persons as may be prescribed in the article.
Section-97 Qualification of Directors
The Articles of a Company usually fix a minimum number of shares which every Director must
subscribe in order to become a Director. This minimum number is known as the qualification
shares of Directors. It is the duty of every Director who is required by the articles to hold a
specified number of shares for qualification and who has not already qualified himself accordingly,
to obtain his qualification within two months after his appointment or such shorter time as may be
fixed by the articles
Section -101 Alternate Director:
For Continuous period of not late than 03 months.

Section-103 Loan of Directors:
No company shall make any loan or give any guarantee or any security in connection with a loan
made by third party to –
a) Any Director of the lending company ;

b) any firm in which any Director of the lending company is a partner;
c) Any private company of which any Director of the lending company is

a Director or Member;
d) Any public company, the Managing agent, Manager or Director where
of this accustomed to act in accordance with the directions of any Director of the
lending Company;
However the loan may be given in case of banking company or the loan is approved by the Board
and AGM represented fairly in FS.
Section 107: Restriction on power of Directors
Without approval of members from General Meeting they shall not-
-Sale any undertaking
-Remit any Debt due from the Director
Section 108 -Vacation of the office of the Director
As per section 108 of the Companies Act, the office of a Director shall become vacant under the
following circumstances:
1. If he fails to obtain within the due time or at any time thereafter fails to hold the
qualifications shares, if any, necessary for his appointment; or
2. If he is found to be of unsound mind by a competent court; or
3. If he is adjudged an insolvent; or
4. If he fails to pay calls money made on him in respect of shares held by him within six
months from the date of such calls being made; or
5. If he contravene section 103 or 104 or 105
6. If he fails to attend 3 Board meetings or all meetings held within 3 months which
ever is longer without approval of the Board
Appointment of Managing Director
Generally Managing Director is appointed by the board of Directors from amongst themselves.
As per section 109 of the CA 1994, a public limited company or any private limited company
which is a subsidiary of a public limited company shall not appoint any person as the Managing
Director who is a Managing Director or Manager of any other Company.
The Govt. many by order permit any person to become the Managing Director of more than one
Companies.
As per section 110 Managing Director may be appointed for a term of maximum 5 years and he
will be eligible for re-appointment having consent of the general meeting.

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Section-42 Book Closure

A company may on giving seven day’s notice by advertisement in the

Required notice period for Companies listed as Z category is 14 working days

Shares and Share Capital:

Nominal, authorized, Registered capital

A Company by a special resolution may declare that “uncalled capital” of the

Difference between Shares and Stocks:

Point of Difference Shares Stocks

cannot be transferred in can be transferred in

1. Increasing of share capital:

2. Consolidation of share capital

4. Sub-division of share capital:

5. Cancellation of share capital

Diminish the share capital which is cancelled

Section-57: Application of Share Premium Account:

For writing off preliminary expenses of the company

For writing off expenses, commission, discount on issue of shares or debenture

In providing for premium payable on the redemption of redeemable preference share

General Meetings and Different type of resolutions: CA1994

Annual General Meeting

For calling AGM notice to the shareholders is to be given at least for 14

Following businesses are generally transacted in the AGM

1. Adoption of annual financial statements and auditors’ report thereon;

As per Section-84, the above meeting can be called on requisition from

(i) Ordinary resolution (ii) Special resolution (iii) Extra-ordinary resolution.

(i) Special resolution:

This is passed in a General meeting by the three-fourth majority of the

Special resolutions are necessary for the following purposes-(Sec-87):

i) To change the name of the Company;

- For winding up the Company voluntarily to the effect that it cannot by

For a public limited Company and a Pvt. Limited Company which is a

A private limited Company shall have at least 2 Directors

Section -91 Appointment of Directors:

a) The subscriber of memorandum shall be deemed to be the first Directors of

One third of the Directors shall retire by rotation in each year.

Section- 94 Disqualification of Directors:

Following persons shall not be eligible for appointment as Director:

- An unsound mind, declared by a competent court;

Section-97 Qualification of Directors

fixed by the articles

Section -101 Alternate Director:

For Continuous period of not late than 03 months.

made by third party to –

a) Any Director of the lending company ;

c) Any private company of which any Director of the lending company is

and AGM represented fairly in FS.

Section 107: Restriction on power of Directors

Without approval of members from General Meeting they shall not-

-Sale any undertaking

-Remit any Debt due from the Director

Section 108 -Vacation of the office of the Director

Appointment of Managing Director

Director who is a Managing Director or Manager of any other Company.

will be eligible for re-appointment having consent of the general meeting.

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