ADVANCED COMPANY LAW AND PRACTICE - ICSI

724 Pages·2016·4.99 MB·English

STUDY MATERIAL
PROFESSIONAL PROGRAMME
ADVANCED COMPANY
LAW AND PRACTICE
MODULE 1
PAPER 1
ICSI House, 22, Institutional Area, Lodi Road, New Delhi 110 003
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© THE INSTITUTE OF COMPANY SECRETARIES OF INDIA
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ADVANCED COMPANY LAW AND PRACTICE
This study material has been published to aid the students in preparing for the Advance Company Law and
Practice paper of the CS Professional Programme. Company Law has undergone radical changes over the past
few years, so is the procedural requirements relating to compliance under various provisions of the Company
Law. As the Company Secretary plays an important role in ensuring compliance of various provisions of the
company law thereby avoiding penal consequences, this study material has been prepared with a view to
provide an expert knowledge and understanding of the various procedural requirements of Company Law. With
this objective in mind, a number of specimen notices, minutes, resolutions and forms have been included at
relevant places. However, the students are advised to study the various procedures relevant for the purpose of
this paper, in the light of the provisions of the Company Law and Rules made thereunder.
Company Secretaryship being a professional course, the examination standards are set very high, with emphasis
on knowledge of concepts, applications, procedures and case laws, for which sole reliance on the contents of
the study material may not be enough. Besides, Company Secretaries Regulations, 1982 requires the students
to be conversant with the amendments to the laws made upto six months preceding the date of examination.
This study material may therefore be regarded as basic material and must be read alongwith the Bare Act,
Rules, Regulations, Case Law, as well as suggested readings.
The study material is based on those sections of the Companies Act, 2013 and the rule made there under
which have been notified by the Government of India (including Amendments/clarifications/circulars issued
there under upto June, 2016). In respect of sections of The Companies Act, 2013 which have not been notified,
applicable sections of Companies Act, 1956 have been dealt with in the study.
The amendments made upto January 2016 have been incorporated in this study material. However, it may
happen that some developments might have taken place during the printing of the study material and its supply
to the students. The students are therefore advised to refer to the e-bulletin ‘Student Company Secretary’ and
ICSI Journal Chartered Secretary and other publications for updation of study material. In the event of any
doubt, students may contact the Directorate of Academics at [email protected].
Should there be any discrepancy, error or omission noted in the study material, the Institute shall be obliged if
the same are brought to its notice for issue of corrigendum in the e-bulletin’ and Student Company Secretary’.
Although due care has been taken in publishing this study material, yet the possibility of errors, omissions and/
or discrepancies cannot be ruled out. This publication is released with an understanding that the Institute shall
not be responsible for any errors, omission and/or discrepancies or any action taken in that behalf.
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SYLLABUS
MODULE 1-PAPER 1: ADVANCED COMPANY LAW AND PRACTICE (100 Marks)
Level of Knowledge: Expert Knowledge
Objective: To acquire expert knowledge of the practical and procedural aspects of the Companies Act.
Detailed Contents:
1. Company Formation and Conversion
– Choice of Form of Business Entity; Conversion/ Re-conversion of One Form of Business Entity into
Another
– Incorporation of Private Companies, Public Companies, Companies Limited by Guarantee and Unlimited
Companies and their Conversions/ Re-conversion/Re-registration
– Formation of Nidhi Companies, Producer Companies and Mutual Benefit Funds
– Commencement of Business and New Business; Pre Incorporation Agreements and Contracts
– Formation of Non Profit Companies
– Procedure Relating to Foreign Companies Carrying on Business in India
2. Procedure for Alteration of Memorandum and Articles
– Alteration of Various Clauses of Memorandum: Name Clause, Situation of Registered Office Clause,
Objects Clause, Capital Clause and Liability Clause
– Effects of Alteration of Articles
3. Procedure for Issue of Securities
Part A: Shares
– Public Issue, Rights Issue and Bonus Shares, Issue of Shares at Par/Premium/Discount; Issue of
Shares on Preferential /Private Placement Basis
– Allotment, Calls on Shares and Issue of Certificates
– Issue of Sweat Equity Shares, Employees Stock Option Scheme (ESOPs), Employees Stock Purchase
Scheme (ESPS), Shares with Differential Voting Rights
– Issue and Redemption of Preference Shares
– Alteration of Share Capital - Forfeiture of Shares and Reissue of Forfeited Shares; Increase,
Consolidation, Conversion and Re-conversion into Stock, Subdivision and Cancellation and Surrender
of Shares
– Buy Back of Shares
– Reduction of Share Capital
Part B: Debt Instruments
– Issue of Debentures and Bonds, Creation of Security and Debenture Redemption Reserve, Drafting of
Debenture Trust Deed, Redemption of Debentures, Conversion of Debentures into Shares
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– Deposits
4. Procedure relating to Membership, Transfer and Transmission
– Induction of Members, Nomination of Shares, Variation of Shareholders’ Rights, Cessation of
Membership including Dispute Resolution
– Transfer/Transmission/Transposition
– Admission of Securities in Electronic Mode
– Dematerialization/ Rematerialisation of Securities
– Compliances relating to Insider Trading and Takeovers
5. Directors and Managerial Personnel
– Obtaining DIN
– Directors and Managerial Personnel- Appointment, Reappointment, Resignation, Removal and
Varying Terms of Appointment/Re-appointment
– Payment of Remuneration to Directors and Managerial Personnel and Disclosures thereof;
Compensation for Loss of Office
– Waiver of Recovery of Remuneration
– Making Loans to Directors, Disclosure of Interest by a Director, Holding of Office or Place of Profit by
a Director/Relative
– Company Secretary - Appointment, Resignation and Removal
– Company Secretary in Practice - Appointment, Resignation and Removal
6. Meetings
– Collective Decision Making Forums - Authority, Accountability, Delegation and Responsibility
– Board Meetings - Convening and Management of Meetings of Board and Committees; Preparation of
Notices and Agenda Papers
– General Meetings - Convening and Management of Statutory Meeting, Annual and Extra-Ordinary
General Meetings, Class Meetings; Creditors’ Meetings; Preparation of Notices and Agenda Papers;
Procedure for Passing of Resolutions by Postal Ballot; Voting through Electronic Means; Conducting a
Poll and Adjournment of a Meeting
– Post-Meeting Formalities - Preparation of Minutes and Dissemination of Information and Decisions
7. Auditors
– Auditors- Procedure for Appointment/Re-appointment, Resignation and Removal of Statutory Auditors
and Branch Auditors; Appointment of Cost Auditors
– Special Auditors; CAG audit
8. Distribution of Profit
– Ascertainment of Distributable Profits and Declaration of Dividend; Payment of Dividend
– Claiming of Unclaimed/Unpaid Dividend; Transfer of Unpaid/Unclaimed Dividend to Investor Education
and Protection Fund
9. Procedure relating to Charges
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– Creation and Registration, Modification, Satisfaction of Charges
– Inspection of charges
10. Procedure relating to Inter-Corporate Loans, Investments, Guarantees and Security
– Making Inter-Corporate Loans, Investments, Giving of Guarantee and Security
11. Preparation & Presentation of Reports
– Preparation of Financial Statements, Auditors’ Report, Directors’ Report and Report on Corporate
Governance
12. E- Filing
– Filling and Filing of Returns and Documents
(a) Annual Filing, i.e., Annual Accounts; XBRL Filing, Compliance Certificate, Annual Return
(b) Event Based Filing
13. Striking off Names of Companies
– Law and Procedure
14. Recent Trends and Developments in Company Law
15. Trusts and Non Profit Organisation
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LIST OF RECOMMENDED BOOKS
MODULE 1
PAPER 1 : ADVANCED COMPANY LAW AND PRACTICE
The students may refer to the given books and websites for further knowledge and study of the subject :
Readings:
1. A Ramaiya : Guide to the Companies Act, Wadhwa & Company, Nagpur
2. D K Jain : E-filing of Forms & Returns, Bharat Law House
3. Taxmann : Company Law and Practice (A comprehensive text book on Companies
Act, 2013)
4. D K Jain : Company Law Procedures, Bharat Law House
5. Taxmann : Companies Act, 2013 with Rules and Forms and SEBI Rules/Regulations/
Guidelines (Set of 3 volumes)
Journals:
1. Chartered Secretary : ICSI Publication
2. Student Company : ICSI Publication
Secretary
3. Corporate Law Adviser : Corporate Law Advisers, Post Bag No. 3, Vasant Vihar, New Delhi.
4. Company Law Journal : L.M. Sharma, Post Box No. 2693, New Delhi - 110005
Website :www.mca.gov.in
Note:
The latest edition of all the books referred to above should be read.
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ARRANGEMENT OF STUDY LESSONS
Study Lesson No. Topic
1. Company formation and conversion
2. Procedure for Alterations of the Memorandum and Articles
3. Issue and Allotment of Securities
4. Alteration of Share Capital
5. Issue and Redemption of Debentures and Bonds
6. Acceptance of Deposits by companies
7. Membership and Transfer/Transmission of Shares
8. Key Managerial Personnel
9. Company Secretary
10. Meetings
11. Auditors
12. Preparation & Presentation of Reports
13. Distribution of Profits
14. Charges
15. Inter-Corporate Loans, Investments, Guarantees and Security
16. E-Filing
17. Striking off Names of Companies
18. Recent Trends and Developments in Company Law
19. Trusts and Non-Profit Orginisation
TEST PAPERS
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CONTENTS
ADVANCED COMPANY LAW AND PRACTICE
LESSON 1
COMPANY FORMATIONAND CONVERSION
Page
Choice of form of business entity 2
Nature, Form and Types of Business Enterprises 2
Non-Corporate Form of Business Enterprises 2
Corporate Form of Business Enterprises 3
Limited Liability Partnership (LLP) 3
Forming a choice 3
Incorporation of companies 3
Promoters to take steps for formation of the Company 4
Procedure for incorporation of public limited company having share capital 5
Obtain Director Identification Number (DIN) 5
Acquire Digital Signature Certificate (DSC) 5
Proposing the name of the Company and ascertaining its availability from the ROC 5
Drafting and Printing of Memorandum and Articles of Association 7
Stamping and Signing of Memorandum and Articles 7
Dating of Memorandum and Articles of Association 7
Registration or Approval from Sectoral Regulation 7
Filing of Documents and Forms for Registration 7
Registration and Filing Fee 9
Minimum Paid-up Capital 9
Scrutiny of Documents and Forms by Registrar 9
Issue of Certificate of Incorporation by Registrar 9
Verification of Registered Office 9
Incorporation of companies through Integrated Incorporation E-form, i.e., E-form INC-29 9
Procedure for incorporation of private limited company having share capital 10
Procedure for incorporation of company limited by guarantee 11
One person company 12
Procedure for incorporation of company for charitable and other public utility purposes without addition
of the words “limited” or “private limited” to its name 13
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Page
Procedure for issue of licence under section 8 to a company already registered 14
Procedure for incorporation of a company as subsidiary of an existing company 16
Unlimited companies 16
Procedure to form a Nidhi company 17
Procedure to register a foreign company in INDIA 17
Conversion of companies 18
Conversion of one person company to private company/public company 18
Procedure for conversion of One Person Company of the Companies Rules 19
Conversion of private company into one person company (Rule 7) 20
Conversion of private company into public company 20
Conversion of public company into a private company 22
Conversion of section 8 company into a company of any other kind (Rule 21) 24
Pre-incorporation agreements and contracts 26
Annexures 27
LESSON ROUND UP 32
SELF-TEST QUESTIONS 32
LESSON 2
PROCEDURE FORALTERATION OF MEMORANDUM ANDARTICLES
Change of name of a company 36
Change of name by rectification 38
Effect of change of name of a company 39
Change of objects of a company 40
Procedure for changing objects of a company 41
Additional requirement – change of objects for which money is raised through prospectus 42
Change of registered office of a company 42
Alteration of articles of association of a company 49
Procedure for Altering Articles of Association 50
Effect of alteration of articles 50
Annexure 51
LESSON ROUND UP 60
SELF-TEST QUESTIONS 60
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