TOPIC 63: QUICK REFERENCE TO “Common but Important Query with answer interpreted by me ”

 .
Query:-
.
The Paid up Capital of ABC pvt ltd is 8 cr. The Company is in the business of Textiles. The Directors are Mr. A and Mr B.
.
Mr A approached to Mr B about Appointment of Mr. C as whole - time CS . But as per the opinion of Mr B the Appointment of CS is not mandatory because The Sections related to Key Managerial Personnel are not all applicable to Pvt Co. And Company Secretarty is a Part of KMP as per section 2(51) of Companies Act, 2013. Then Both the Directors approached Mr. XYZ Practising Company Secretarty for the Opinion in line the Legal requirement. They asked following Questions to Mr. XYZ.
1. Whether the Company Should appoint CS in whole time employment ?
2. If yes then, Can Company has to appoint only FCS member of ICSI ?
3. Whether Company can appoint PCS as a Company Secretary of That Company?
.
Answers:-
.
1. The Company is required to appoint a Whole time CS because the Paid up Capital of the Company is more than ₹ 5 cr. Even though, The Sections related to KMP are not applicable to Private Company then also it's mandatory because Specific provision of Rule 8 A will prevail over Rule 8 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
.
2. The ACS member of ICSI can also be appointed as CS of the Company.
.
3. PCS cannot be appointed as a CS of any Company because he should be in a employment basis anywhere. If PCS surrendered his COP then after that, he can join any Company as a Whole time CS.
.
.
.
Query:- (Answer to the Common Query for Buy Back of Shares)
.
ABC ltd decide to Buy-Back of shares. The Shares are in the physical form. Whether Company is required to Pay Stamp duty for physical Shares?
.
Answer:-
.
1. No. Company is not required to Pay Stamp duty for Buy-Back of shares as per Indian Stamp Act, 1899.
.
2. There is no Registration & Transfer of Shares Involved in the Buy-Back of shares.
.
3. Hence, The Company is not required to Pay Stamp duty for Buy-Back of shares.
.
.
.
Query:-
.
How to apply for Compounding for Offence under Companies Act, 2013 (Procedure / Checklist)
.
Answer:-
.
1. The Board Resolution in the Board meeting as per Section 441 of Companies Act, 2013 is required to be Passed.
.
2. The CS or Director or Officer of the Company has to apply for Compounding with ROC within the matter of Jurisdiction.
.
3. The Form GNL-1 is required to file with ROC. The attachments are:- # Board Resolution, Affidavit, Cause for delay in letter head of Company , any notice received by Company from ROC.
.
4. Fees for making Application is ₹ 1,000.
.
5. The ROC forward that form to RD.
.
6. The RD may fixed the time for Hearing and then pass the Compounding Order.
.
7. The Company has to File that order with ROC in form no. INC-28.
.
8. If Default is from the side of Directors or CS or Officer then fees for Compounding shall be paid from their Personal Fund/ Amount.

.
.
.
Query:- (Answer to the Common Query for Special Resolution)
.
Abc ltd is a listed company. It has 3000 members. But 2500 members do not attend the meeting. Company sends notice to all the members. 320 members are abstrain from voting. Then how many members should have vote in favour of resolution, if it is to be passed as a Special Resolution?? Whether answer would be different it it's a unlisted public company??
.
Answer:-
.
1. 75% Votes should be cast in favor of resolution by members who are present and entitled to vote in person. ( Assuming it is ballot method ).
.
2. In the above case, Only 500 members have attended the meeting. And 320 are restrain from voting. And only 180 people have votes for the resolution ( 500 -320 =180 ).
.
3. Hence, 75% of 180 i.e. 135 members should vote in favour of resolution if it's a Special Resolution.
.
4. Answer would be same even if it's a unlisted public company..


Regards
ACA SOURAV BAGARIA

TOPIC 62: QUICK REFERENCE TO “FEW COMMON & BASIC THINGS RELATED TO A COMPANY LAW/ANSWER TO THE COMMON QUESTION ( MIXED): PART 4”

.

.
1. Section 8 Company can be amalgamate Only with another Section 8 Company having Same/Similar Objects.
.
2. Anybody (individual or llp or firm or Company) accepting Public Deposit of ₹ 1 Crore or more has to be mandatorily registered with RBI as well as SEBI as a NBFC.
.
3. No Person Can file case on the Void Contracts. Normally Injunction is Available.
.
4. The Issue & Listing of Non- Convertible debt securities are governed by SEBI ( Issue & Listing of Debt Securities ) Regulations, 2008.
.
5. Sovereign Bonds are issued by RBI.
.
6. Approval of Prospectus cannot be dealt in a meeting through Video- Conferencing.
.
7. If the Amount of Fine is upto ₹ 5 lakh then Compounding can be done by Regional Director and if its more than that, then it's Compounded by NCLT.
.
8. Class - Action suit is filed at NCLT & not at High Court.
.
9. The Working hours of NCLT is from 9:30 AM to 6 PM ( Except sat, sun, national holiday). As per Rule 10 of NCLT rules, 2016.
.
10. The Minor cannot become Member or Nominee of OPC.
.
11. Form MGT-14 is not required to filed for Shifting of Registered Office from One Place to Another Place within Same city or village.
.
12. Form MR-1 is not required to filed for Appointment of CEO, CS & CFO .
.
13. Two AGM can be held on same day.
.
14. Section 62 i.e. Further issue of Share Capital is not applicable to Nidhi Company.
.
15. The Redemption of Redeemable Preference Shares does not require NCLT Confirmation.
.
16. Diminution of Share Capital means Cancellation of Unsubscribed part of Issued Capital.
.
17. The Company cannot issue Prospectus to more than 500 persons without Appointment of Debenture Trustee.
 .
.
Regards
ACA SOURAV BAGARIA

TOPIC 61: QUICK REFERENCE TO “FEW COMMON & BASIC THINGS RELATED TO A COMPANY LAW/ANSWER TO THE COMMON QUESTION ( MIXED): PART 3”

.

.
1. In Case of Company having Share capital, each subscriber is required to take atleast 1 share.
.
2. The Clerical errors in the AOA can be corrected through Special resolution and not by direct rectification.
.
3. The E-Voting Period shall be for minimum of 3 days and end necessarily by 1 day before the shareholders meeting at 5 p.m.
.
4. In case of Company having Share capital, any member present in person or proxy holding 1/10th of Total Voting power or Holding ₹ 5 lakh or more paid up share capital can demand for poll under section 109 (1) of Companies Act, 2013.
.
5. Issue of Global Depository Receipts require Special resolution at general meeting.
.
6. Issue of Bonus shares does not lead into New/ Fresh funds in the hands of Company.
.
7. Minimum Application money should be 5% of Nominal value of Security. ( 25 % for listed Companies under SEBI guidelines).
.
8. Indian subsidiary of listed company also require to file financial statements in AOC-4 XBRL.
.
9. If Company is required to Appoint Independent Director then they should meet atleast once in a Calendar Year.
.
10. Notice as a Candidature for appointment as Director can be given to the Registered office of Company at least before 14 days. ( Except Retiring Director).
.
11. Section 185 i.e. Loan to Directors is applicable to Private as Well as Public Company.
.
12. Credit sale not to considered as a Loan.
.
13. The Provision wrt Directors retire by rotation is not Applicable to Government Company if entire paid up Capital is held by Central govt. Or State govt. Or Central govt & One or more state govt.
.
14. Nidhi Company should be a Public Company and having minimum of 5 lakh rupees paid up equity share capital.
.
15. Two resubmissions are allowed in SPICe mode of Incorporation
 .
.
Regards
ACA SOURAV BAGARIA

TOPIC 60: QUICK REFERENCE TO “FEW COMMON & BASIC THINGS RELATED TO A COMPANY LAW/ANSWER TO THE COMMON QUESTION ( MIXED): PART 2”

.

.
1. The Annual Return Form in FC-4 should be filed within 60 days from end of F.Y. by foreign Company.
.
2. Payment of ₹ 1 lakh Deposit for Right of persons other than retiring directors to stand for directorship is not applicable for Private Company.
.
3. SPICe mode of Incorporation is not applicable for Producer Company.
.
4. The Unlimited Company is not eligible for Conversion into limited Company by guarantee or shares if networth is negative.
.
5. Entrenchment provision in AOA means making alteration in AOA more difficult to protect the minority.
.
6. Voluntary Conversion of OPC to pvt co or pub co. Does not require Form INC-5.
.
7. Form NCLT-1 is required to file for Application to cancel variation of rights under section 48 (2) of Companies Act, 2017.
.
8. No business cannot be transacted for which notice was not provided.
.
9. Unintentional omission of notice to auditors does not invalidate the general meeting.
.
10. Adjournment of Meeting is different from Postponement of Meeting.
.
11. E-Voting facility is not mandatory for Company whose Debenture or Preference shares are only listed.
.
12. Company cannot issue Irredeemable Preference Shares.
.
13. Form PAS-4 and PAS-5 is not applicable for Rights issue of shares.
.
14. Ordinary Resolution is Sufficient for Issue of Further Shares under Employee Stock options in case of Private Company.
.
15. A Call can be made by liquidator in case of Winding up of the Company.
.
16. Lien on shares does not leaf to reduction of Capital.
.
17. NCLT confirmation is not required for alteration of capital under section 61 of Companies Act, 2013.
.
18. Debenture Certificate should be issued within 6 months from allotment of Debentures.
.
19. Employee or Officer of the Company cannot become statutory auditor of that Company.
.
20. A Mortgage can only created by Act of Parties and not by operation of law.
.
21. The Indemnity Bond is mandatory attachment for striking off the Company by its own motion in form STK-2.
.
22. DRR is not mandatory to create for Banking Companies.
.
23. Loan taken from Public financial institutions is not considerd as Deposit.
.
24. The Provisions of Filling of Casual vacancy for a directors is not applicable for Private Company.
.
25. The Managing Director can continue as a manager even though he ceases to be a director.
 .
.
Regards
ACA SOURAV BAGARIA

TOPIC 59: QUICK REFERENCE TO “Few Common & Basic things related to a Company law/Answer to the Common Question ( Mixed): PART 1”

.

.
1. The Company is not a citizen under citizenship act, 1955.
.
2. The Board resolution is passed by either requisite majority or unanimously ( in some cases).
.
3. Proxy is not counted in Quorum.
.
4. The section 8 companies are not allowed to pay dividend.
.
5. A person holding office as Director in more than 20 companies can still Appointed in the section 8 company.
.
6. Appointment of Statutory Auditor is mandatory for all Companies.
.
7. Manager of the Company need not be a Director of the Company.
.
8. Form MR-1 is not required to file for Appointment of CEO, CS, CFO.
.
9. An Independent director is not entitled for Stock option.
.
10. Rotation of Directors is not Applicable to Independent director.
.
11. A Company shall not issue debentures carrying Voting Rights.
.
12. Only natural person can become Director of a Company.
.
13. One Person Company's financial statements shall be signed by only 1 director.
.
14. The CSR expenditure cannot be claimed for Tax exemption.
.
15. Form ADT-1 is not required to file in case of Appointment of 1st Auditor.
.
16. Producer company can issue only equity shares.
.
17. In case of Ballot method of Voting & Show of hand - 1 shareholder= 1 Vote.
.
18. In case of Poll method 1 share = 1 Vote.
.
19. Incorporation through SPICe mode is not Applicable for More than seven subscribers.
.
20. Nidhi Company can be incorporated through SPICe mode.
.
21. Death of Additional Director & First Director is not Considered as Casual Vacancy.
.
22. Final Dividend is recommended by BOD and Declared by Shareholders in the AGM.
.
23. The Company Did not function is not an excuse for not Convening an AGM.
.
24. Sweat equity shares can be issued at Discount.
.
25. Bonus shares shall not be issued in lieu of Dividend.
.
26. Section 8 Company can have any number of Directors.
.
27. OPC cannot be converted into a Section 8 company.
.
28. The Register of Members can be closed for total period of 45 days in a year but not more than 30 days at one time.
.
29. Right to renounce is available for Right Share but not for Bonus shares.
.
30. Single entry system of maintenance of books is prohibited.
 .
.
Regards
ACA SOURAV BAGARIA

TOPIC 58: QUICK REFERENCE TO “Company Secretary”

.
Quick Reference to "Company Secretary".
.
Legal Provision:-.
Section 2(24), 2(25), 2(51), 203, 205, of Companies Act, 2013.
Rule 8A of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
Company Secretaries Act, 1980.
 .
.
Points:-.
.
1. In simple words, Company Secretary means A Member of Institute of Company Secretaries of India.
.
2. Membership is either Associate Member (ACS) or Fellow Member (FCS).
.
3. ACS is the first membership of ICSI and if that person completed 5 years from date of ACS membership then he/she can apply for fellow member.
.
4. PCS i.e. Practising Company Secretary must have membership number plus Certificate of Practice ( COP number). He must be in full time practice.
.
5. Any Company having paid up capital of ₹ 5 cr or more should have whole time cs in employment.
.
6. Company Secretary is considered as Key Managerial Personnel.
.
7. The Secretarial Audit can done by PCS only.
.
8. Form DIR-12 and MGT-14 is required to file for appointment of CS in Company.
.
9. Basically, Company Secretary is the Compliance officer. He has to ensure about Compliance of Companies under various Acts, rules etc..
.
10. A Company Secretary must not hold office in more than one Company except in its subsidiary Company at the same time.
.
11. The Form MR-1 is not required to filed for appointment of Company Secretary.
 .
.
Regards
ACA SOURAV BAGARIA

TOPIC 57: QUICK REFERENCE TO “Query related to Statutory Auditor”

.
Quick Reference to " Query related to Statutory Auditor " :-
.
Query:-.
Abc ltd decide to appoint Mr, X as a Statutory Auditor of Company. ABC ltd is a listed Company. Mr X is already engaged as a Statutory Auditor in following Companies:-
8 Listed Companies
6 Public Companies.
6 Pvt Companies which has paid up capital of 500 Cr.
So, Whether Mr X can be appointed as Statutory Auditor of Abc ltd as per Companies Act, 2013??
 .
.
Answer :-.
1.No. He cannot be appointed as Statutory Auditor of Abc ltd as per Section 141 (3) (G) of Companies Act, 2013.
.
2. As per Section 141(3) (G) the limit is of 20 Companies in which a person can be appointed as Statutory Auditor of Company excluding OPC,
Dormant Company, Small Companies, Pvt Co having paid up share capital of less than ₹ 100 Cr.
.
3. Hence, as per the Query/ Question, Mr X is within the purview of Applicability of those Companies and that's why he cannot be further appointed as Statutory Auditor of Company excluding above Companies.
 .
.
Regards
ACA SOURAV BAGARIA

TOPIC 56: QUICK REFERENCE TO “35 Basics w.r.t. Company Law”

.
.
Quick Reference to " 35 Basics w.r.t. Company Law" :-.
.
1. The Company is not a citizen under citizenship act, 1955.
.
2. The Board resolution is passed by either requisite majority or unanimously ( in some cases).
.
3. Proxy is not counted in Quorum.
.
4. The section 8 companies are not allowed to pay dividend.
.
5. A person holding office as Director in more than 20 companies can still Appointed in the section 8 company.
.
6. Appointment of Statutory Auditor is mandatory for all Companies.
.
7. Manager of the Company need not be a Director of the Company.
.
8. Form MR-1 is not required to file for Appointment of CEO, CS, CFO.
.
9. An Independent director is not entitled for Stock option.
.
10. Rotation of Directors is not Applicable to Independent director.
.
11. A Company shall not issue debentures carrying Voting Rights.
.
12. Only natural person can become Director of a Company.
.
13. One Person Company's financial statements shall be signed by only 1 director.
.
14. The CSR expenditure cannot be claimed for Tax exemption.
.
15. Form ADT-1 is not required to file in case of Appointment of 1st Auditor.
.
16. Producer company can issue only equity shares.
.
17. In case of Ballot method of Voting & Show of hand - 1 shareholder= 1 Vote.
.
18. In case of Poll method 1 share = 1 Vote.
.
19. Incorporation through SPICe mode is not Applicable for More than seven subscribers.
.
20. Nidhi Company can be incorporated through SPICe mode.
.
21. Death of Additional Director & First Director is not Considered as Casual Vacancy.
.
22. Final Dividend is recommended by BOD and Declared by Shareholders in the AGM.
.
23. The Company Did not function is not an excuse for not Convening an AGM.
.
24. Sweat equity shares can be issued at Discount.
.
25. Bonus shares shall not be issued in lieu of Dividend.
.
26. Section 8 Company can have any number of Directors.
.
27. OPC cannot be converted into a Section 8 company.
.
28. The Register of Members can be closed for total period of 45 days in a year but not more than 30 days at one time.
.
29. Right to renounce is available for Right Share but not for Bonus shares.
.
30. Single entry system of maintenance of books is prohibited.
.
31. NBFC cannot accept Demand Deposits.
.
32. Section 202 i.e. Compensation for Loss of Office is applicable only to MD, WTD, Manager.
.
33. Provisions of Loan to Directors i.e. Section 185 is Applicable to Public as well as Private Company.
.
34. Provisions of Political Contribution is not Applicable to Government Company. ( Sec. 182).
.
35. Revised SS-1 & SS-2 is not applicable to Section 8 Companies and OPCs.
 .
.
Regards
ACA SOURAV BAGARIA

TOPIC 55: QUICK REFERENCE TO “Query w.r.t. Issue of Further Redeemable Shares for Redemption of Earlier Preference Shares”
.

Quick Reference to " Query w.r.t. Issue of Further Redeemable Shares for Redemption of Earlier Preference Shares " :-
.
( Coversation Illustrative Example ):-
.
The Conversation/ Meeting is between Director and PCS :-
 .
Director (Mr A):-
Hello ! Good Morning Sir,
.
PCS (Mr B):-
Ya..Good Morning...Would u like to take tea or Coffee ?? Y r u so tensed ?? What happened?? Tell me.
.
Director ( Mr. A) :-
Sir, Actually tell me the exact solution for my problem w.r.t. Our Company.
.
PCS (Mr. B ):-
Yes..Tell me first.
.
Director (Mr. A ):-
Basically, Our Company is not in a position to redeem Preference Shares. We are paying dividend on regular basis but not able to redeemed . So Can we Issue further Redeemable Preference Shares to redeem earlier Preference Shares ?
.
PCS (Mr B ):-
Yes Sir, U can Issue further Redeemable Preference Shares to redeem earlier Preference Shares through NCLT route.
.
Director ( Mr A ):-
How ?? What r the requirements?? What about Fees ??
.
PCS ( Mr. B ):-
Firstly, U have to take consent of holders of 3/4 this in Value of Such Preference Shares & The Approval of NCLT.
Form NCLT-1 is required to filed with the attachments of MOA, AOA, Terms of Issue of existing Preference Shares details, Board Resolution & General Resolution Copy for further Redeemable Preference Shares, latest director report, latest Auditor, Affidavit (Form NCLT-6), Demand Draft of ₹ 5,000 as a Application fees, Memorandum of Appearance ( Form NCLT-12 ), Notice Of Admission ( Form NCLT-2 ).
.
Director ( Mr A ):-
Ok. But, what will be the value upto which we can issue further shares?
.
PCS ( Mr. B ):-
The Value shall be the equal to the amount due in respect of existing Preference Shares.
.
Director (Mr. A):-
What about your Professional Fees in this regard ?
.
PCS ( Mr. B ):-
Sir, That i will provide u through e-mail with other details also.
.
Director (Mr A):-
Ok. Thanks a lot Sir. Have a nice day..Bye.
.
PCS ( Mr B ) :-
Ya..Tc..Bye.
 .
.
Regards
ACA SOURAV BAGARIA

TOPIC 54: QUICK REFERENCE TO “Time limit to issue share certificates”
.

Quick Reference for Time limit to issue share certificates---
.
Legal provision:-
.
Sec. 56(4) of Companies Act, 2013.
.
.
Points:
.
1. In case of Incorporation -
within 2 months from the date of Incorporation.
.
2. In case of allotment of shares-
Within 2 months from the date of allotment.
.
3. In case of transfer/ transmission of securities-
Within 1 month from date of receipt of instrument by the company.
.
4. In case of Duplicate/ Renewed share certificate-
Within 45 days ( Listed co)
Within 3 months ( Unlisted co).
.
5. Allotment of Debenture-
Within 6 months from date of allotment.
 .
.
Regards
ACA SOURAV BAGARIA

TOPIC 53: QUICK REFERENCE TO “General Rules about Payment of Call Money”
.

Quick Reference to "General Rules about Payment of Call Money" :-
.
1. The Board of Directors have Authotity to make calls on Shares by Resolution passed at the Board Meeting.
.
2. The application amount payable on each share must be minimum of 5% of Nominal Amount of Share.
.
3. The 14 days notice is required to be send by the Company to its members for each call.
.
4. The Gap/ Interval of 1 month is required between Two Calls.
.
5. Not More than 25% of Nominal Value of Shares can be called at one time.
.
6. A member can pay call money in advance , even if no part of that amount has been called up.
.
7. The Directors of the Company has power to Postpone a call once it's made.
.
8. The Directors of the Company has power to Revoke a call once it's made.
.
9. The members is liable to pay interest if he is fail to pay call money.
.
10. The AOA of the Company may have separate rules regarding Payment of Call money.
.
11. The Payment of Dividend should be in a Proportion to the Amount of Paid-up on each shares. ( Section 51 of Companies Act, 2013 ).
.
 .
Regards
ACA SOURAV BAGARIA

TOPIC 52: QUICK REFERENCE TO “Issue of Securities at Premium”
.

Quick Reference to " Issue of Securities at Premium" :-
.
Legal Provision:-
.
Section 52 of Companies Act, 2013.
 .
.
Points:-
.
1. Issue of Securities to Premium means selling of Security at a price above par value.
.
2. There is no prohibition for issue of Securities at Premium.
.
3. The amount should be transferred to "Securities Premium Account".
.
4. The amount of premium is not available for distribution of dividend.
.
5. The Securities Premium cannot be considered as Profit of the Company.
.
6. The Securities Premium can be utilized for :-
# Writing off Preliminary expenses of the Company.
#Buy - Back of shares.
#Writing off Commission paid.
#Issue of Bonus Shares.
# Premium payable on Redemption of Redeemable Preference Shares.
#Premium payable on Redemption of Redeemable Debentures.
.
7. #FV 10. & MP 10 = at par.
# FV 10. & MP 12 = at Premium.
# FV 10. & MP 8 = at discount( but it's not allowed except in case of Sweat Equity Shares)
 .
.
Regards
ACA SOURAV BAGARIA

TOPIC 51: QUICK REFERENCE TO “Amicus Curiae under NCLT rules 2016”

.
Quick Reference to " Amicus Curiae under NCLT rules 2016 " :-
.
1. Rule 61 of NCLT rules, 2016 deals with" Amicus Curiae ".
.
2. It simply means, " Friend of Court or Companion of Judicature.
.
3. It is a Unbiased Consultant to a court of law in a Specific Matter.
.
4. It is a Latin Phrase.
.
5. It is basically a Person ( other than party to the case ) who Provides
aid/help to the Court by giving Information related to Case.
.
6. The NCLT may approve Amicus Curiae to have Approach in the Case of Parties.
.
7. It is Absolutely different Concept from " Lodging of Caveat".
.
8. The decision on whether to admit/accept the information lies / upto the discretion or Choice of the NCLT.
.
9. The Final Decision / Judgement should be Provide by NCLT to the Parties and Amicus Curiae also.
 .
.
Regards
ACA SOURAV BAGARIA

TOPIC 50: QUICK REFERENCE TO “NCLT”

.
Quick Reference to "NCLT" :-
.
.
1. NCLT means National Company Law Tribunal.
.
2. The NCLT have bene constituted from 1st June, 2016.
.
3. In simple words, NCLT means "Company Court"
.
4. The Company Law Board stands dissolved w.e.f.1st June, 2016.
.
5. The Board for Industrial and Financial Reconstruction (BIFR) and Appeallate Autthority for Industrial and Financial Reconstruction (AAIFR) were abolished and their work along with CLB is transferred to NCLT.
.
6. The Powers relating to Insolvency matter have been vested with NCLT due to Insolvency and Bankruptcy Code, 2016.
.
7. The Ministry of Corporate Affairs has Constituted the NCLT.
.
8. Appeals should be made to National Company Law Appellate Tribunal ( NCLAT) against the order of NCLT.
.
9. The Order of NCLT is required to be filled with ROC.
.
10. Important Legal Provision:- section 408, 409, 412, 413, 414 of Companies Act, 2013.
NCLT Rules, 2016.
.
11. If the amount of Penalty is more than ₹ 5 lakh then that offence is Compounded by NCLT.
 .
.
Regards
ACA SOURAV BAGARIA

TOPIC 49: QUICK REFERENCE TO “Insider Trading”

.
Quick Reference about "Insider Trading":-
.
Legal Provision:-.
Section 195 of Companies Act, 2013.
SEBI (Prohibition of Insider Trading) Regulations, 2015.
 .
.
Points:-
.
1. Insider Trading means dealing with "Unpublished Price Sensitive Information".
.
2. It's absolutely illegal.
.
3. Insider Trading affects the the Price of Securities of the Company.
.
4. It is not apply in ordinary course of business or profession or employment.
.
5. It includes activities like buying, selling, dealing of Securities by Director or KMP or any other officer of the Company on the basis of Unpublished Price Sensitive Information.
.
6. Penalty as per Section 195(2) of Companies Act, 2013 :-
The person is punishable for imprisonment of a term which may extend to 5 years or with fine which shall not be less than ₹ 5 lakh but which may extend to ₹25 crore or 3 times of amount of profit made from Insider Trading, whichever is higher or both.
.
7. Insider Trading also includes an act of Counselling about Price Prediction whether directly or Indirectly to any person.
.
8. Insider gets Inequitable gain from trading through Malpractices.
 .
.
Regards
ACA SOURAV BAGARIA

TOPIC 48: QUICK REFERENCE TO “Charges”
.

Quick Reference about "Charges" :-
.
Legal Provision:-
.
Section 2 (16) , section 77 to 87 of Companies Act, 2013.
Companies (Registration of Charges) Rules, 2014.
Section 100 of Transfer of Property Act, 1882.
 .
.
Points:-
.
1. Charge is the Right or Interest created on the Property.
.
2. Charges can be Fixed or Floating.
.
3. Charge may be created by Act of Parties or operation of law.
.
4. Form CHG-1 (other than Debentures) and Form CHG-9 ( for Debentures) is used for creation or modification of Charges. It should be filed within 30 days.
.
5. Form CHG-4 is require to file for satisfaction of charge.
.
6. Form CHG-7 deals with Register of charges maintained by the Company.
.
7. If Charge is not registered then Unregistered charge holder becomes an Unsecured creditor.
.
8. Crystallisation of Charge means Conversion of Floating Charge into Fixed Charge.
.
9. If Form CHG-1 is not filed within 30 days then Registrar allows to file the form within 300 days and Application for delay should be in the Form CHG-10 . If it is not filed within 300 days then application should be made in Form CHG-8.
.
10 . The Company is also punishable with fine of ₹ 1 lakh and maximum upto ₹ 10 lakh for Non-Registration of Charge.
.
11. Charge is different from mortgage.
 .
.
Regards
ACA SOURAV BAGARIA

TOPIC 47: QUICK REFERENCE TO “Circulation of Financial Statements”

.

Quick Reference to " Circulation of Financial Statements ":-
.
Legal Provision:-
.
Rule 11 of Companies (Accounts) Rules, 2014.
.
.
Points:-
.
1. It is applicable for Listed Companies.
.
2. It is also applicable for Public Companies having net worth of more than 1 Crore Rupees and Turnover of More than 10 Crore Rupees.
.
3. The Financial Statement can be sent by electronic mode if the Shares are held in Demat form.
.
4. Despatch of Physical Copies can be for other company.
 .
.
Regards
ACA SOURAV BAGARIA

TOPIC 46: QUICK REFERENCE TO “Debenture”

.
Quick Reference to "Debenture" :-
.
1. In General sense, Debenture is an "Acknowledgement of Debt."
.
2. "Interest" is the ultimate return on Debenture.
.
3. It is not allowed to issue Debentures carrying voting rights.
.
4. Debenture is a part of Owed/ Borrowed Capital.
.
5. Debenture can be Secured, Unsecured, Redeemable, Convertible.
.
6. Special Resolution in General meeting is require for Issue of Debentures.
.
7. Debentures can be issued at Discount.
.
8. Secured Debentures should he Redeemed within 10 years from the date of issue of Debentures. (There are Certain exemptions also)
.
9. Appointment of Debenture Trustee is mandatory if Company wants to issue Prospectus for Issue of Debentures to more than 500 person.
.
10. For Issue of Non-Convertible Debentures, the company is require to follow SEBI ( Issue and Listing Debt Securities) Regulations, 2008.
.
11. For Issue of Convertible Debentures,
The company is require to follow SEBI (ICDR) Regulations, 2009
.
12. Debenture Redemption Reserve is require to create Redemption of Debentures (Not Applicable for Banking Sector Company, All india Financial Institutions).
Rate of DRR is 25%
.
13. E-Form CHG-9 is require to file in Case of Secured Debentures.
.
14. The certificate of Debenture Should be issued within 6 months from the date of allotment of Debenture.
.
15. Legal Provision:-
#Section 2(30), 71. Of Companies Act, 2013.
# Rule 18 of Company (Share Capital and Debentures) Rules, 2014.
.
16. Interest on the debenture is a tax deductible expenditure as per Income tax act.
 .
.
Regards
ACA SOURAV BAGARIA

TOPIC 45: QUICK REFERENCE TO “Portfolio Manager”

.

Quick Reference to " Portfolio Manager " :-
.
Points:-
.
1. Simply, Portfolio Manager means a person registered with SEBI who directs or advises or manages the funds of the client.
.
2. The Non- Refundable fees of ₹ 1 lakh is required to be Paid by the applicant as a Application fees paid to SEBI.
.
3. The Registration fees should be paid by Demand Draft in favor of SEBI. It's ₹ 10 lakh.
.
4. The Registration Certificate is valid for 3 years . Renewal fees - 5 lakh ₹.
.
5. The Minimum networth of Portfolio Manager should be ₹ 2 Crore as a Capital Adequacy.
.
6. There must be Contract between Portfolio Manager and Client.
.
7. The Portfolio Manager can be Discretionary or Non- Discretionary.
.
8. The Discretionary Portfolio Manager Independently manages the Funds of each client.
.
9. The Non-Discretionary Portfolio Manager manages funds as per the directions provided by Client.
.
10. The Portfolio Manager is required to Accept minimum of ₹ 5 lakhs for providing services to the client.
.
11. Portfolio Manager cannot borrow on behalf of Clients. He can only invest that amount.
.
12. The Agreement between Portfolio Manager and Client includes rules which are governed by itself.
.
13. SEBI does not certify the Adequacy of the Particulars of Disclosure Documents.
.
14. The Portfolio Manager cannot offer guaranteed returns to the Clients.
.
15. The Portfolio Manager cannot impose a Lock-in Period for the Investment of the Client.
.
16. Investor can approach to SEBI for redressal about Complaints. Complaint can be send to Officer of Investor Assistance And Education. SEBI Bhavan , BKC - Mumbai.
.
17. The Funds of the Securities can be withdrawn by the Client before Maturity period of Contract.
 .
.
Regards
ACA SOURAV BAGARIA

TOPIC 44: QUICK REFERENCE TO “Private Placement”

.
Quick Reference to " "Private Placement" :-
.
.
Points:-
.
1. Section 42 of Companies Act, 2013 & Rule 14 of Companies ( Prospectus & Allotment of Securities ) Rules, 2014. Deals with Private Placement.
.
2. Simply, Private Placement means Issue of Securities to a small number of Selected Investors.
.
3. It's not a Public Offer.
.
4. Offer & Issue can be made to 50 person at a time but not more than 200 Persons in aggregate/total during a Financial Year. ( QIB's & Employees are not covered ).
.
5. Consideration cannot be made through Cash.
.
6. Special Resolution is required but AOA authorization is not required.
.
7. Private placement offer letter should be in a Form PAS-4 and Record of Private Placement should be in a PAS-5.
.
8. PAS-3 i.e. Return of Allotment is required to file with ROC.
.
9. The Value of Offer per person shall be minimum of 20,000 of Face value of Securities.
.
10. The Offer for Private Placement is Separately Considered for Each type of Securities.
.
11. The Company has to Allot Securities within 60 days from the date of receipt of Application Money..
.
12. Valuation Report is not required for Private Placement.
 .
.
Regards
ACA SOURAV BAGARIA