EXECUTIVE PROGRAMME STUDY MATERIAL …

1 EXECUTIVE PROGRAMME STUDY MATERIAL COMPANY LAW MODULE II - PAPER 4 ICSI House, 22, Institutional Area, Lodi Road, New Delhi 110 003 tel 011-4534 1000, 4150 4444 fax +91-11-2462 6727 email website 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 Grams: COMPSEC Fax: 011-24626727 Website: E-mail: Laser Typesetting by Delhi Computer Services, Dwarka, New Delhi, and Printed at Printers, NOIDA/ 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 purpose of this STUDY MATERIAL is to develop an understanding of the regulation of registered companies and to provide thorough understanding of the various provisions of the Company Law as well as Schedules and Rules made thereunder including their interpretation through case laws, departmental clarifications etc.

3 Additionally this STUDY MATERIAL also provides conceptual understanding of the principles of Cooperatives Law. 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 along with the Bare Act, Rules, Regulations, Case Law, as well as suggested readings.

4 The amendments made upto December, 2011 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 'Student Company Secretary', Chartered Secretary and other publications for updation of STUDY MATERIAL . In the event of any doubt, students may contact the Directorate of Academics and Professional Development in the Institute for clarification. Although due care has been taken in publishing this STUDY MATERIAL yet the possibility of errors, omissions and/or discrepancies cannot be ruled out.

5 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 'Student Company Secretary'. (iii) (iv) EXECUTIVE PROGRAMME SYLLABUS FOR PAPER 4: COMPANY LAW Level of knowledge : Expert knowledge. Objective: To develop an understanding of the regulation of companies and to provide thorough knowledge of the various provisions of the Company Law in India as well as Schedules and Rules made thereunder including their interpretation through case laws, departmental circulars, clarifications, notifications, etc.

6 Detailed contents : 1. Introduction Nature and form of business enterprise; types of business enterprises; company definition and nature. Historical development of corporate concepts; emergence of principles of limited liability and development of Company Law in England and India. Concept of corporate personality; corporate veil and its lifting. Working and administration of Company Law. 2. Incorporation and its Consequences Types of companies and their incorporation; memorandum and articles of association and their alteration; registered office; publication of name; commencement of business; contracts; deeds; common seal; effect of incorporation.

7 Re-registration and registration of unregistered joint-stock companies. The doctrine of ultra-vires, constructive notice and indoor management. Promoters - meaning and importance; position, duties and liabilities. 3. Financial Structure Concept of capital and financing of companies, sources of capital; classes and types of shares; equity 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. Alteration of share capital; reduction of capital; buy-back of shares.

8 Debt capital - debentures, debenture stock, bonds; new developments in corporate debt financing; debenture trust deed and trustees; conversion of and redemption of debentures. Securing of debts creation, modification and satisfaction of charges. (v) Prospectus definition; abridged prospectus; red-herring prospectus; shelf prospectus; information memorandum; contents, registration, misrepresentations and penalties. Allotment and certificates - contracts to subscribe for shares, debentures and other securities; calls; share certificates and share warrants. 4. Membership, Depositories and Transfer/Transmission Membership - 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 depository modes; nomination.

9 5. Management and Control of Companies Directors appointment/re-appointment, qualifications, disqualifications, remuneration, vacation of office, retirement, resignation and removal; loans to directors; powers and duties; office or place of profit; role of directors; contracts in which directors are interested. Managing and whole-time directors and manager. Company secretary appointment, role and responsibilities; company secretary as a principal officer. Meetings of directors and committees - frequency, convening, and proceedings of Board/Committee meetings; tele and video-conferencing of Board/ Committee(s); resolution by circulation; minutes and evidence.

10 General meetings - kinds of meetings; law, practice and procedure relating to convening and proceedings at general and other meetings notice, quorum, proxy, voting including voting through electronic means, resolutions, circulation of members resolution, etc.; postal ballot; recording, signing and inspection of minutes; role of chairman. 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.