THE COMPANIES ACT, 2013 Analysis

ARRANGEMENT OF SECTIONS

CHAPTER I

PRELIMINARY

SECTIONS

1. Short title, extent, commencement and application.

2. Defination

CHAPTER II

INCORPORATION OF COMPANY AND MATTERS INCIDENTAL THERETO

3. Formation of company.

4. Memorandum

5. Articles

6. Act to override memorandum, articles, etc.

7. Incorporation of company.

8. Formation of companies with charitable objects, etc.

9. Effect of registration.

10. Effect of memorandum and articles.

11. [Omitted]

12. Registered office of company.

13. Alteration of memorandum.

14. Alteration of articles.

15. Alteration of memorandum or articles to be noted in every copy.

16. Rectification of name of company.

17. Copies of memorandum, articles, etc., to be given to members.

18. Conversion of companies already registered.

19. Subsidiary company not to hold shares in its holding company.

20. Service of documents.

21. Authentication of documents, proceedings and contracts.

22. Execution of bills of exchange, etc.

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23. Public offer and private placement.

24. Power of Securities and Exchange Board to regulate issue and transfer of securities, etc.

25. Document containing offer of securities for sale to be deemed prospectus.

26. Matters to be stated in prospectus.

27. Variation in terms of contract or objects in prospectus.

28. Offer of sale of shares by certain members of company.

29. Public offer of securities to be in dematerialised form.

30. Advertisement of prospectus.

31. Shelf prospectus.
32. Red herring prospectus.
33. Issue of application forms for securities.
34. Criminal liability for mis-statements in prospectus.

35. Civil liability for mis-statements in prospectus.

​PART II.—Private placement

42. Offer or invitation for subscription of securities on private placement.

43. Kinds of share capital.
44. Nature of shares or debentures.
45. Numbering of shares.
46. Certificate of shares.
47. Voting rights
48. Variation of shareholders‘ rights.
49. Calls on shares of same class to be made on uniform basis.
50. Company to accept unpaid share capital, although not called up.
51. Payment of dividend in proportion to amount paid-up.
52. Application of premiums received on issue of shares.
53. Prohibition on issue of shares at discount.
54. Issues of sweat equity shares.
55. Issue and redemption of preference shares.
56. Transfer and transmission of securities.
57. Punishment for personation of shareholder.
58. Refusal of registration and appeal against refusal.
59. Rectification of register of members.
60. Publication of authorised, subscribed and paid-up capital.
61. Power of limited company to alter its share capital.
62. Further issue of share capital.
63. Issue of bonus shares.
64. Notice to be given to Registrar for alteration of share capital.
65. Unlimited company to provide for reserve share capital on conversion into limited company.
66. Reduction of share capital.
67. Restrictions on purchase by company or giving of loans by it for purchase of its shares.
68. Power of company to purchase its own securities.
69. Transfer of certain sums to capital redemption reserve account.
70. Prohibition for buy-back in certain circumstances.
71. Debentures.
72. Power to nominate.

73. Prohibition on acceptance of deposits from public.
74. Repayment of deposits, etc., accepted before commencement of this Act.
75. Damages for fraud.

CHAPTER VI

REGISTRATION OF CHARGES

77. Duty to register charges, etc.
78. Application for registration of charge.
79. Section 77 to apply in certain matters.
80. Date of notice of charge.
81. Register of charges to be kept by Registrar.
82. Company to report satisfaction of charge.
83. Power of Registrar to make entries of satisfaction and release in absence of intimation from company.
84. Intimation of appointment of receiver or manager.
85. Company‘s register of charges.
86. Punishment for contravention.
87. Rectification by Central Government in register of charges.

88. Register of members, etc.
89. Declaration in respect of beneficial interest in any share.
90. Investigation of beneficial ownership of shares in certain cases.
91. Power to close register of members or debenture holders or other security holders.
92. Annual return.
93. Return to be filed with Registrar in case promoters‘ stake changes.
94. Place of keeping and inspection of registers, returns, etc.
95. Registers, etc., to be evidence.
96. Annual general meeting.
97. Power of Tribunal to call annual general meeting.
98. Power of Tribunal to call meetings of members, etc.
99. Punishment for default in complying with provisions of sections 96 to 98.
100. Calling of extraordinary general meeting.
101. Notice of meeting.
102. Statement to be annexed to notice.
103. Quorum for meetings.
104. Chairman of meetings.
105. Proxies.
106. Restriction on voting rights.
107. Voting by show of hands.
108. Voting through electronic means.
109. Demand for poll.
110. Postal ballot.
111. Circulation of members‘ resolution.
112. Representation of President and Governors in meetings.
113. Representation of corporations at meeting of companies and of creditors.
114. Ordinary and special resolutions.
115. Resolutions requiring special notice.
116. Resolutions passed at adjourned meeting.
117. Resolutions and agreements to be filed.

CHAPTER VIII

DECLARATION AND PAYMENT OF DIVIDEND

123. Declaration of dividend.
124. Unpaid Dividend Account.
125. Investor Education and Protection Fund.
126. Right to dividend, rights shares and bonus shares to be held in abeyance pending registration of transfer of shares.
127. Punishment for failure to distribute dividends.

CHAPTER IX

ACCOUNTS OF COMPANIES

128. Books of account, etc., to be kept by company.
129. Financial statement.
130. Re-opening of accounts on court‘s or Tribunal‘s orders.
131. Voluntary revision of financial statements or Board‘s report.
132. Constitution of National Financial Reporting Authority.
133. Central Government to prescribe accounting standards
134. Financial statement, Board‘s report, etc.
135. Corporate Social Responsibility.
136. Right of member to copies of audited financial statement.
137. Copy of financial statement to be filed with Registrar.
138. Internal Audit.

CHAPTER X

AUDIT AND AUDITORS

139. Appointment of auditors.
140. Removal, resignation of auditor and giving of special notice.
141. Eligibility, qualifications and disqualifications of auditors.
142. Remuneration of auditors.
143. Powers and duties of auditors and auditing standards.
144. Auditor not to render certain services.
145. Auditor to sign audit reports, etc.
146. Auditors to attend general meeting.
147. Punishment for contravention.

148. Central Government to specify audit of items of cost in respect of certain companies.

CHAPTER XI

APPOINTMENT AND QUALIFICATIONS OF DIRECTORS

149. Company to have Board of Directors.

SECTIONS

150. Manner of selection of independent directors and maintenance of data bank of independent directors.
151. Appointment of director elected by small shareholders.
152. Appointment of directors.
153. Application for allotment of Director Identification Number.
154. Allotment of Director Identification Number.
155. Prohibition to obtain more than one Director Identification Number.
156. Director to intimate Director Identification Number.
157. Company to inform Director Identification Number to Registrar.
158. Obligation to indicate Director Identification Number.
159. Punishment for contravention.
160. Right of persons other than retiring directors to stand for directorship.
161. Appointment of additional director, alternate director and nominee director.
162. Appointment of directors to be voted individually.
163. Option to adopt principle of proportional representation for appointment of directors.
164. Disqualifications for appointment of director.
165. Number of directorships.
166. Duties of directors.
167. Vacation of office of director.
168. Resignation of director.
169. Removal of directors.
170. Register of directors and key managerial personnel and their shareholding.
171. Members‘ right to inspect.
172. Punishment.

173. Meetings of Board.
174. Quorum for meetings of Board.
175. Passing of resolution by circulation.
176. Defects in appointment of directors not to invalidate actions taken.
177. Audit committee.
178. Nomination and Remuneration Committee and Stakeholders Relationship Committee.
179. Powers of Board.
180. Restrictions on powers of Board.
181. Company to contribute to bona fide and charitable funds, etc.
182. Prohibitions and restrictions regarding political contributions.
183. Power of Board and other persons to make contributions to national defence fund, etc.
184. Disclosure of interest by director.
185. Loan to directors, etc.
186. Loan and investment by company.
187. Investments of company to be held in its own name.
188. Related party transactions.
189. Register of contracts or arrangements in which directors are interested.
190. Contract of employment with managing or whole-time directors.
191. Payment to director for loss of office, etc., in connection with transfer of undertaking, property or shares.
192. Restriction on non-cash transactions involving directors.
193. Contract by One Person Company.
194. Prohibition on forward dealings in securities of company by director or key managerial
personnel.
195. Prohibition on insider trading of securities.

SECTIONS

196. Appointment of managing director, whole-time director or manager.
197. Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits.
198. Calculation of profits.
199. Recovery of remuneration in certain cases.
200. Central Government or company to fix limit with regard to remuneration.
201. Forms of, and procedure in relation to, certain applications.
202. Compensation for loss of office of managing or whole-time director or manager.
203. Appointment of key managerial personnel.
204. Secretarial audit for bigger companies.
205. Functions of company secretary.

CHAPTER XIV

INSPECTION, INQUIRY AND INVESTIGATION

206. Power to call for information, inspect books and conduct inquiries.
207. Conduct of inspection and inquiry.
208. Report on inspection made.
209. Search and seizure.
210. Investigation into affairs of company.
211. Establishment of Serious Fraud Investigation Office.
212. Investigation into affairs of company by Serious Fraud Investigation Office.
213. Investigation into company‘s affairs in other cases.
214. Security for payment of costs and expenses of investigation.
215. Firm, body corporate or association not to be appointed as inspector.
216. Investigation of ownership of company.
217. Procedure, powers, etc., of inspectors.
218. Protection of employees during investigation.
219. Power of inspector to conduct investigation into affairs of related companies, etc.
220. Seizure of documents by inspector.
221. Freezing of assets of company on inquiry and investigation.
222. Imposition of restrictions upon securities.
223. Inspector‘s report.
224. Actions to be taken in pursuance of inspector‘s report.
225. Expenses of investigation.
226. Voluntary winding up of company, etc., not to stop investigation proceedings.
227. Legal advisers and bankers not to disclose certain information.
228. Investigation, etc., of foreign companies.
229. Penalty for furnishing false statement, mutilation, destruction of documents

230. Power to compromise or make arrangements with creditors and members.
231. Power to Tribunal to enforce compromise or arrangement.
232. Merger and amalgamation of companies.
233. Merger or amalgamation of certain companies.
234. Merger or amalgamation of company with foreign company.

SECTIONS

235. Power to acquire shares of shareholders dissenting from scheme or contract approved by
majority.
236. Purchase of minority shareholding.
237. Power of Central Government to provide for amalgamation of companies in public interest.
238. Registration of offer of schemes involving transfer of shares.
239. Preservation of books and papers of amalgamated companies.
240. Liability of officers in respect of offences committed prior to merger, amalgamation, etc

CHAPTER XVI

PREVENTION OF OPPRESSION AND MISMANAGEMENT

241. Application to Tribunal for relief in cases of oppression, etc.
242. Powers of Tribunal.
243. Consequence of termination or modification of certain agreements.
244. Right to apply under section 241.
245. Class action.
246. Application of certain provisions to proceedings under section 241 or section 245

CHAPTER XVII

REGISTERED VALUERS

247. Valuation by registered valuers.

CHAPTER XVIII

​REMOVAL OF NAMES OF COMPANIES FROM THE REGISTER OF COMPANIES

248. Power of Registrar to remove name of company from register of companies.
249. Restrictions on making application under section 248 in certain situations.
250. Effect of company notified as dissolved.
251. Fraudulent application for removal of name.
252. Appeal to Tribunal.

CHAPTER XIX

REVIVAL AND REHABILITATION OF SICK COMPANIES

253. Determination of sickness.
254. Application for revival and rehabilitation.
255. Exclusion of certain time in computing period of limitation.
256. Appointment of interim administrator.
257. Committee of creditors.
258. Order of Tribunal.
259. Appointment of administrator.
260. Powers and duties of company administrator.
261. Scheme of revival and rehabilitation.
262. Sanction of scheme.
263. Scheme to be binding.
264. Implementation of scheme.
265. Winding up of company on report of company administrator.
266. Power of Tribunal to assess damages against delinquent directors, etc.
267. Punishment for certain offences.
268. Bar of jurisdiction.
269. Rehabilitation and Insolvency Fund

CHAPTER XX

WINDING UP

SECTIONS

270. Modes of winding up

PART I.—Winding up by the Tribunal

271. Circumstances in which company may be wound up by Tribunal.
272. Petition for winding up.
273. Powers of Tribunal.
274. Directions for filing statement of affairs.
275. Company Liquidators and their appointments.
276. Removal and replacement of liquidator.
277. Intimation to Company Liquidator, provisional liquidator and Registrar.
278. Effect of winding up order.
279. Stay of suits, etc., on winding up order.
280. Jurisdiction of Tribunal.
281. Submission of report by Company Liquidator.
282. Directions of Tribunal on report of Company Liquidator.
283. Custody of company‘s properties.
284. Promoters, directors, etc., to cooperate with Company Liquidator.
285. Settlement of list of contributories and application of assets.
286. Obligations of directors and managers.
287. Advisory Committee.
288. Submission of periodical reports to Tribunal.
289. Power of Tribunal on application for stay of winding up.
290. Powers and duties of Company Liquidator.
291. Provision for professional assistance to Company Liquidator.
292. Exercise and control of Company Liquidator‘s powers.
293. Books to be kept by Company Liquidator.
294. Audit of Company Liquidator‘s accounts.
295. Payment of debts by contributory and extent of set-off.
296. Power of Tribunal to make calls.
297. Adjustment of rights of contributories.
298. Power to order costs.
299. Power to summon persons suspected of having property of company, etc.
300. Power to order examination of promoters, directors, etc.
301. Arrest of person trying to leave India or abscond.
302. Dissolution of company by Tribunal.
303. Appeals from orders made before commencement of Act.

PART II.—Voluntary winding up

304. Circumstances in which company may be wound up voluntarily.
305. Declaration of solvency in case of proposal to wind up voluntarily.
306. Meeting of creditors.
307. Publication of resolution to wind up voluntarily.
308. Commencement of voluntary winding up.
309. Effect of voluntary winding up.
310. Appointment of Company Liquidator.
311. Power to remove and fill vacancy of Company Liquidator.
312. Notice of appointment of Company Liquidator to be given to Registrar.
313. Cesser of Board‘s powers on appointment of Company Liquidator

SECTIONS

314. Powers and duties of Company Liquidator in voluntary winding up.
315. Appointment of committees.
316. Company Liquidator to submit report on progress of winding up.
317. Report of Company Liquidator to Tribunal for examination of persons.
318. Final meeting and dissolution of company.
319. Power of Company Liquidator to accept shares, etc., as consideration for sale of property of
company.
320. Distribution of property of company.
321. Arrangement when binding on company and creditors.
322. Power to apply to Tribunal to have questions determined, etc.
323. Costs of voluntary winding up.

 

PART III.—Provisions applicable to every mode of winding up

324. Debts of all descriptions to be admitted to proof.
325. Application of insolvency rules in winding up of insolvent companies.
326. Overriding preferential payments.
327. Preferential payments.
328. Fraudulent preference.
329. Transfers not in good faith to be void.
330. Certain transfers to be void.
331. Liabilities and rights of certain persons fraudulently preferred.
332. Effect of floating charge.
333. Disclaimer of onerous property.
334. Transfers, etc., after commencement of winding up to be void.
335. Certain attachments, executions, etc., in winding up by Tribunal to be void.
336. Offences by officers of companies in liquidation.
337. Penalty for frauds by officers.
338. Liability where proper accounts not kept.
339. Liability for fraudulent conduct of business.
340. Power of Tribunal to assess damages against delinquent directors, etc.
341. Liability under sections 339 and 340 to extend to partners or directors in firms or companies.
342. Prosecution of delinquent officers and members of company.
343. Company Liquidator to exercise certain powers subject to sanction.
344. Statement that company is in liquidation.
345. Books and papers of company to be evidence.
346. Inspection of books and papers by creditors and contributories.
347. Disposal of books and papers of company.
348. Information as to pending liquidations.
349. Official Liquidator to make payments into public account of India.
350. Company Liquidator to deposit monies into scheduled bank.
351. Liquidator not to deposit monies into private banking account.
352. Company Liquidation Dividend and Undistributed Assets Account.
353. Liquidator to make returns, etc.
354. Meetings to ascertain wishes of creditors or contributories.
355. Court, tribunal or person, etc., before whom affidavit may be sworn.
356. Power of Tribunal to declare dissolution of company void.
357. Commencement of winding up by Tribunal.
358. Exclusion of certain time in computing period of limitation

PART IV.—Official Liquidators

SECTIONS
359. Appointment of Official Liquidator.
360. Powers and functions of Official Liquidator.
361. Summary procedure for liquidation.
362. Sale of assets and recovery of debts due to company.
363. Settlement of claims of creditors by Official Liquidator.
364. Appeal by creditor.
365. Order of dissolution of company.

CHAPTER XX

PART I.—Companies authorised to Register under this Act

366. Companies capable of being registered.
367. Certificate of registration of existing companies.
368. Vesting of property on registration.
369. Saving of existing liabilities.
370. Continuation of pending legal proceedings.
371. Effect of registration under this Part.
372. Power of Court to stay or restrain proceedings.
373. Suits stayed on winding up order.
374. Obligations of companies registering under this Part.

PART II.—Winding up of unregistered companies

375. Winding up of unregistered companies.
376. Power to wind up foreign companies although dissolved.
377. Provisions of Chapter cumulative.
378. Saving and construction of enactments conferring power to wind up partnership firm, association
or company, etc., in certain cases.

CHAPTER XXII

COMPANIES INCORPORATED OUTSIDE INDIA

379. Application of Act to foreign companies.
380. Documents, etc., to be delivered to Registrar by foreign companies.
381. Accounts of foreign company.
382. Display of name, etc., of foreign company.
383. Service on foreign company.
384. Debentures, annual return, registration of charges, books of account and their inspection.
385. Fee for registration of documents.
386. Interpretation.
387. Dating of prospectus and particulars to be contained therein.
388. Provisions as to expert‘s consent and allotment.
389. Registration of prospectus.
390. Offer of India Depository Receipts.
391. Application of sections 34 to 36 and Chapter XX.
392. Punishment for contravention.
393. Company‘s failure to comply with provisions of this Chapter not to affect validity or contracts,
etc

CHAPTER XXIII

GOVERNMENT COMPANIES

SECTIONS
394. Annual reports on Government companies.
395. Annual reports where one or more State Governments are members of companies.

CHAPTER XXIV

​REGISTRATION OFFICES AND FEES

396. Registration offices.
397. Admissibility of certain documents as evidence.
398. Provisions relating to filing of applications, documents, inspection, etc., in electronic form.
399. Inspection, production and evidence of documents kept by Registrar.
400. Electronic form to be exclusive, alternative or in addition to physical form.
401. Provision of value added services through electronic form.
402. Application of provisions of Information Technology Act, 2000.
403. Fee for filing, etc.
404. Fees, etc., to be credited into public account.

CHAPTER XXV

​COMPANIES TO FURNISH INFORMATION OR STATISTICS

405. Power of Central Government to direct companies to furnish information or statistics.

CHAPTER XXVI

NIDHIS

406. Power to modify Act in its application to Nidhis.

CHAPTER XXVII

​NATIONAL COMPANY LAW TRIBUNAL AND APPELLATE TRIBUNAL

407. Definitions.
408. Constitution of National Company Law Tribunal.
409. Qualification of President and Members of Tribunal.
410. Constitution of Appellate Tribunal.
411. Qualifications of Chairperson and members of Appellate Tribunal.
412. Selection of Members of Tribunal and Appellate Tribunal.
413. Term of office of President, Chairperson and other Members.
414. Salary, allowances and other terms and conditions of service of Members.
415. Acting President and Chairperson of Tribunal or Appellate Tribunal.
416. Resignation of Members.
417. Removal of Members.
418. Staff of Tribunal and Appellate Tribunal.
419. Benches of Tribunal.
420. Orders of Tribunal.
421. Appeal from orders of Tribunal.
422. Expeditious disposal by Tribunal and Appellate Tribunal.
423. Appeal to Supreme Court.
424. Procedure before Tribunal and Appellate Tribunal.
425. Power to punish for contempt

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SECTIONS

426. Delegation of powers.
427. President, Members, officers, etc., to be public servants.
428. Protection of action taken in good faith.
429. Power to seek assistance of Chief Metropolitan Magistrate, etc.
430. Civil court not to have jurisdiction.
431. Vacancy in Tribunal or Appellate Tribunal not to invalidate acts or proceedings.
432. Right to legal representation.
433. Limitation.
434. Transfer of certain pending proceedings.

CHAPTER XXVIII

SPECIAL COURTS

435. Establishment of Special Courts.
436. Offences triable by Special Courts.
437. Appeal and revision.
438. Application of Code to proceedings before Special Court.
439. Offences to be non-cognizable.
440. Transitional provisions.
441. Compounding of certain offences.
442. Mediation and Conciliation Panel.
443. Power of Central Government to appoint company prosecutors.
444. Appeal against acquittal.
445. Compensation for accusation without reasonable cause.
446. Application of fines.
 

CHAPTER XXIX

MISCELLANEOUS

447. Punishment for fraud.
448. Punishment for false statement.
449. Punishment for false evidence.
450. Punishment where no specific penalty or punishment is provided.
451. Punishment in case of repeated default.
452. Punishment for wrongful withholding of property.
453. Punishment for improper use of ―Limited‖ or ―Private Limited‖.
454. Adjudication of penalties.
455. Dormant company.
456. Protection of action taken in good faith.
457. Non-disclosure of information in certain cases.
458. Delegation by Central Government of its powers and functions.
459. Power of Central Government of Tribunal to accord approval, etc., subject to conditions and to
prescribe fees on applications.
460. Condonation of delay in certain cases.
461. Annual report by Central Government.
462. Power to exempt class or classes of companies from provisions of this Act.
463. Power of court to grant relief in certain cases.
464. Prohibition of association or partnership of persons exceeding certain number.
465. Repeal of certain enactments and savings.
466. Dissolution of Company Law Board and consequential provisions.
467. Power of Central Government to amend Schedules.
468. Power of Central Government to make rules relating to winding up

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SECTIONS

469. Power of Central Government to make rules.
470. Power to remove difficulties.
SCHEDULE I
SCHEDULE II
SCHEDULE III
SCHEDULE IV
SCHEDULE V
SCHEDULE VI
SCHEDULE VII