COMPANYCOMPANY LAWLLAAWWLAW - ICSI

1 STUDY MATERIAL EXECUTIVE PROGRAMME COMPANYCOMPANYCOMPANYCOMPANY LAWLAWLAWLAW PAPER 1 ICSI House, 22, Institutional Area, Lodi Road, New Delhi 110 003 tel 011-4534 1000, 4150 4444 fax +91-11-2462 6727 email website (ii) THE INSTITUTE OF COMPANY SECRETARIES OF INDIA TIMING OF HEADQUARTERS Monday to Friday Office Timings to Public Dealing Timings Without financial transactions to With financial transactions to Phones 41504444, 45341000 Fax 011-24626727 Website E-mail Laser Typesetting by Delhi Computer Services, Dwarka, New Delhi Printed at IPP/JULY 2017 EXECUTIVE PROGRAMME COMPANY LAW In view of increasing emphasis on adherence to norms of good corporate governance, Company Law assumes an added importance in the corporate legislative milieu, as it deals with structure, management, administration and conduct of affairs of Companies.

2 A thorough study of various provisions of the Companies Act is a must for becoming a competent and efficient Company Secretary. In the light of this, the study material has been published to impart thorough knowledge to the students preparing for the Company Law paper of the CS Executive Programme. The study material is based on those sections of the Companies Act, 2013 and the rules made there under which have been notified by the Government of India and came into force April 01, 2014 (including Amendments/clarifications/circulars issued there under upto June, 2017). 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.

3 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 along with the notified provisions of Companies Act 2013 and Rules made thereunder. The amendments made upto June, 2017 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 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 Although due care has been taken in publishing this study material yet the possibility of errors, omissions and/or discrepancies cannot be ruled out.

4 This publication is released with an understanding that the Institute shall not be responsible for any errors, omissions and/or discrepancies or any action taken in that behalf. 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'. (iv) EXECUTIVE PROGRAMME SYLLABUS FOR MODULE 1 - PAPER 1: COMPANY LAW (100 MARKS) Level of Knowledge: Expert Knowledge Objective: To acquire knowledge and develop understanding of the regulatory framework of companies with reference to various provisions of Companies Act and its schedules, rules, notifications, circulars, clarifications there under including case laws and Secretarial standards.

5 Detailed Contents: 1. Introduction Historical Development of Concept of Corporate Law in India Company Definition, Meaning, Nature and its Characteristics Nature and Forms of Business Company vis- -vis other Forms of Business Concept of Corporate Personality, Corporate Veil, Limited Liability and Citizenship 2. Incorporation and its Consequences Types of Companies and their incorporation Promoters Meaning, Position, Duties, Rights, Responsibilities and Liabilities Formation of Companies Procedural Aspects Memorandum of Association & Articles of Association and their Alteration Contracts and Conversion of Companies Commencement of Business Doctrine of Ultra-Vires, Constructive Notice, Indoor Management, Alter Ego 3. Financial Structure Concept of Capital and Financing of Companies Sources of Capital; Classes and Types of Shares; Equity Shares with Differential Rights; Issue of Shares at Par, Premium and Discount; Forfeiture and Surrender of Shares; Bonus Issues; Rights Issues; Issue of Sweat Equity Shares; Employees Stock Option Scheme; Private Placement; preference shares and other forms of securities Alteration of Share Capital Reduction of Capital; Buy Back of Shares Prospectus Definition; Abridged Prospectus; Red Herring Prospectus; Shelf Prospectus; Information Memorandum; Contents, Registration; Misrepresentations and Penalties Debt Capital Debentures, Debenture Stock, Bonds; Recent Trends and Dynamics of Corporate Debt Financing.

6 Debenture Trust Deed and Trustees; Conversion of and Redemption of Debentures Securing of Debts:Charges ; Creation, Modification and Satisfaction of Charges Allotment and Certificates General Principles and Statutory Provisions related to Allotment; (v) Minimum Subscription; Irregular Allotment; Procedure of Issue of Share Certificates and Warrants 4. Membership in a Company Modes of Acquiring Membership Rights and Privileges of Members, Register of Members Dematerialisation and Rematerialisation of Securities Transfer and Transmission of Securities in Physical and Dematerialized forms Nomination 5. Management and Control of Companies Directors Types, Director s Identification Number (DIN), Appointment/Reappointment, Qualifications, Disqualifications, Vacation of Office, retirement , Resignation and removal of Managing and Whole Time Directors and Manager Role and Responsibilities of Directors Powers and Duties Loans to Directors Remuneration of Directors Office or Place of Profit Contracts in which Directors are Interested Board of Directors and its Committees Company Secretary Appointment, Role and Responsibilities Company Secretary as a Key Managerial Personnel Meetings: Meetings of Board and Committees Frequency, Convening, Proceedings, Video Conferencing of Board/Committee(s).

7 Resolution by Circulation; Minutes and Evidence General Meetings Kinds of Meetings; Law, Practice and Procedure Relating to Convening and Proceedings at General and Other Meetings; Notice, Quorum, Chairman, Proxy, Voting including Voting through Electronic Means; Resolutions, Circulation of Members Resolution, etc.; Postal Ballot; Recording, Signing and Inspection of Minutes; Distribution of Powers of a Company Division of Powers between Board and General Meetings; Acts by Directors in Excess of Authority; Monitoring and Management Sole Selling and Buying Agents Meaning, Appointment and Reappointment, removal ; Powers of Central Government and Rules Framed for the Purpose 6. Investments, Loans and Deposits Law relating to making investments in and granting loans to other bodies corporate and giving guarantees and providing security Acceptance of Deposits, Renewal, Repayment, Default and Remedies 7.

8 Accounts and Audit Books of Accounts Financial Statements Auditors Appointment, Resignation and removal ; Qualification and Disqualification; Rights, Duties and Liabilities Audit and Auditor s Report (vi) Cost Audit and Special Audit 8. Dividends Profit and Ascertainment of Divisible Profits Declaration and Payment of Dividend Treatment of Unpaid and Unclaimed Dividend Transfer of Unpaid and Unclaimed Dividend to Investor Education and Protection Fund Board s Report and Disclosures Contents and Annexure to Board s Report Directors Responsibility Statement Preparation and Disclosures Compliance Certificate Need and Objective; Issue and Signing by Practising Company Secretary Corporate Governance Report 9. Registers, Forms and Returns Statutory Books and Registers prescribed under various provisions of the Company Law Maintenance, Authentication Place of Keeping and Inspection Filing of various Forms and Returns with the Authorities Procedure and Penalties for Delayed Filing Annual Return Nature and Significance; Contents; and Certification by Practising Company Secretary 10.

9 Inspection and Investigation Inspection of Documents Powers of the Inspector Seizure of Books And Documents Inspector s Report Power of the Registrar of Companies Investigation into Affairs of the Company 11. Majority Rule and Minority Rights Law relating to Majority Powers and Minority Rights Shareholder Remedies Actions by Shareholders; Statutory Remedies; Personal Actions Prevention of Oppression and Mis-Management 12. Merger, De-merger, Amalgamation, Compromises and Arrangements An Overview 13. Producer Companies Concept, Formation, Functioning and Dissolution 14. Limited Liability Partnerships Concept, Formation, Membership, Functioning and Dissolution 15. Application of Company Law to Different Sectors Banking Insurance (vii) Others 16.

10 Offences and Penalties Introduction Officer in Default Penalties 17. Compounding of Offences 18. Winding up of Companies An Overview Concept and Modes 19. Striking Off Name of Companies 20. An Introduction to E-Governance and XBRL (viii) LIST OF RECOMMENDED BOOKS MODULE I PAPER 1 : COMPANY LAW Readings: 1. Dr. Avtar Singh : Company Law; Eastern Book Company, 34, Lalbagh, Lucknow 226 001 2. Datta : Datta on the Company Law; Lexis Nexis, Butterworths Wadhwa, Nagpur 3. A. Ramaiya : Guide to the Companies Act; Lexis Nexis, Butterworths Wadhwa, Nagpur 4. Garg, Chawla, Vijay Gupta : Company Law; Kalyani Publishers, 1/1, Rajinder Nagar, Civil Lines, Ludhiana 141 001. 5. Majumdar, Dr. Kapoor, Sanjay Dhamija : Company Law and Practice; Taxmann, 59/32, New Rohtak Road, New Delhi-110 005.