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Companies Act, 1956


Contents

Sections

Particulars

Part I

Preliminary

1

short title, commencement and extent

2

Definitions

2A

Interpretation of certain words and expressions

3

Definitions ofcompany existing company private company and public company

4

Meaning of “holding company and subsidiary

4A

Public financial institutions

5

Meaning of “officer who is in default

6

Meaning of “relative

7

Interpretation of “person in accordance with whose directions or instructions directors are accustomed to act

8

Power of Central Government to declare an establishment not to be a branch office

9

Act to override memorandum, articles, etc

10

Jurisdiction of Courts

10A

[Omitted]

10B

[Omitted]

10C

[Omitted]

10D

[Omitted]

Part I-A

Board Of Company Law Administration

10E

Constitution of Board of Company Law Administration

10F

Appeals against the orders of the Company Law Board

Part II

Incorporation Of Company And Matters Incidental Thereto Certain Companies, Associations And Partnerships To Be Registered As Companies Under Act.

11

Prohibition of associations and partnerships exceeding certain number. Memorandum of Association

12

Mode of forming incorporated company

13

Requirements with respect to memorandum

14

Form of memorandum

15

Printing and signature of memorandum

15A

Special provision as to alteration of memorandum consequent on alteration of name of State of Madras

15B

Special provision as to alteration of memorandum consequent on alteration of name of State of Mysore

16

Alteration of memorandum

17

Special resolution and confirmation by (Company Law Board) required for alteration of memorandum

17A

Change of registered office within a State

18

Alteration to be registered within three months

19

Effect of failure to register

 

  Provisions with respect to names of companies

20

Companies not to be registered with undesirable names

21

Change of name by company

22

Rectification of name of company

23

Registration of change of name and effect thereof

24

Change of name of existing private limited companies

25

Power to dispense withLimited in name of charitable or other company

 

  Articles of Association

26

Articles prescribing regulations

27

Regulations required in case of unlimited company, company limited by guarantee or private company limited by shares

28

Adoption and application of Table A in the case of companies limited by shares

29

Form of articles in the case of other companies

30

Form and signature of articles

31

Alteration of articles by special resolution

 

  Change of registration of companies

32

Registration of unlimited company as limited, etc.

 

  General provisions with respect to memorandum and articles

33

Registration of memorandum and articles

34

Effect of registration

35

Conclusiveness of certificate of incorporation

36

Effect of memorandum and articles

37

Provision as to companies limited by guarantee

38

Effect of alteration in memorandum or articles

39

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

40

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

 

  Membership of company

41

Definition ofmember

42

Membership of holding company

 

  Private companies

43

Consequences of default in complying with conditions constituting a company a private company

43A

Private company to become public company in certain cases

44

Prospectus or statement in lieu of prospectus to be filed by private company on ceasing to be private company

 

 Reduction of number of members bellow legal minimum

45

Members severally liable for debts where business carried on with fewer than seven, or in the case of a private company, two members

 

  Contracts and deeds, investment, seal, etc.

46

Form of contracts

47

Bills of exchange and promissory notes

48

Execution of deeds

49

Investments of company to be held in its own name

50

Power for company to have official seal for use outside India

 

  Service of documents

51

Service of documents on company

52

Service of documents on Registrar

53

Service of documents on members by company

 

  Authentication of documents and proceedings

54

Authentication of documents and proceedings

Part III

Prospectus And Allotment, And Other Matters Relating To Issue Of shares Or Debentures

 

  Prospectus    

55

Dating of prospectus

55A

Powers of Securities and Exchange Board of India

56

Matters to be stated and reports to be set out in prospectus

57

Expert to be unconnected with formation or management of company

58

Expert's consent to issue of prospectus containing statement by him

58A

Deposits not to be invited without issuing an advertisement

58AA

Small depositors

58AAA

Default in acceptance or refund of deposits to be cognizable

58B

Provisions relating to prospectus to apply to advertisement

59

Penalty and interpretation

60

Registration of prospectus

60A

shelf Prospectus

60B

Information memorandum

61

Terms of contract mentioned in prospectus or statement in lieu of prospectus, not to be varied

62

Civil liability for mis-statements in prospectus

63

Criminal liability for misstatements in prospectus

64

Document containing offer of shares or debentures for sale to be deemed prospectus

65

Interpretation of provisions relating to prospectuses

66

Newspaper advertisements of prospectus

67

Construction of references to offering shares or debentures to the public, etc.

68

Penalty for fraudulently inducing persons to invest money

68A

Personation for acquisition, etc., of shares

68B

Initial offer of securities to be in dematerialized form in certain cases Allotment

69

Prohibition of allotment unless minimum subscription received

70

Prohibition of allotment in certain cases unless statement in lieu of prospectus delivered to Registrar

71

Effect of irregular allotment

72

Applications for, and allotment of, shares and debentures

73

Allotment of shares and debentures to be dealt in on stock exchange

74

Manner of reckoning fifth, eighth and tenth days in sections 72 and 73

75

Return as to allotments

 

  Commissions and discounts

76

Power to pay certain commissions and prohibition of payment of all other commissions, discounts, etc

77

Restrictions on purchase by company, or loans by company for purchase, of its own or its holding company's shares

77A

Power of company to purchase its own securities

77AA

Transfer of certain sums to capital redemption reserve account

77B

Prohibition for buy-back in certain circumstances

 

  Issue of shares at premium and discount

78

Application of premiums received on issue of shares

79

Power to issue shares at a discount

79A

Issue of sweat equity shares

 

  Issue and Redemption of preference shares etc.

80

Power to issue redeemable preference shares

80A

Redemption of irredeemable preference shares, etc

 

  Further issue of capital

81

Further issue of capital

Part IV

share Capital And Debentures

 

  Nature, numbering and certificate of shares

82

Nature of shares

83

Numbering of shares

84

Certificate of shares

 

  Kinds of share capital

85

Two kinds of share capital

86

New issues of share capital to be only of two kinds

87

Voting rights

88

Prohibition of issue of shares with disproportionate rights

89

Termination of disproportionately excessive voting rights in existing companies

90

Savings

 

  Miscellaneous provisions as to share capital

91

Calls on shares of some class to be made on uniform basis

92

Power of company to accept unpaid share capital, although not called up

93

Payment of dividend in proportion to amount paid-up

94

Power of limited company to alter its share capital

94A

share capital to stand increased where an order is made under section 81(4)

95

Notice to Registrar of consolidation of share capital, conversion of shares into stock, etc

96

Effect of conversion of shares into stock

97

Notice of increase of share capital or of members

98

Power of unlimited company to provide for reserve share capital on re-registration

99

Reserve liability of limited company

 

  Reduction of share capital

100

Special resolution for reduction of share capital

101

Application to Court for confirming order, objections by creditors and settlement of list of objecting creditors

102

Order confirming reduction and powers of Court on making such order

103

Registration of order and minute of reduction

104

Liability of members in respect of reduced shares

105

Penalty for concealing name of creditor, etc

 

  Variation of shareholders’ rights

106    

Alteration of rights of holders of special classes of shares

107    

Rights of dissentient shareholders

 

  Transfer of shares and debentures

108

Transfer not to be registered except on production of instrument of transfer

108A

Restriction on acquisition of certain shares

108B

Restriction on transfer of shares

108C

Restriction on the transfer of shares of foreign companies

108D

Power of Central Government to direct companies not to give effect to the transfer

108E

Time within which refusal to be communicated

108F

Nothing in sections 108A to 108D to apply to Government companies, etc

108G

Applicability of the provisions of sections 108A to 108F

108H

Construction of certain expressions used in sections 108A to 108G

108-I

Penalty for acquisition or transfer of share in contravention of sections 108A to 108D

109

Transfer by legal representative

109A

Nomination of shares

109B

Transmission of shares

110

Application for transfer

111

Power to refuse registration and appeal against refusal

111A

Rectification of Register on transfer

112

Certification of transfers

 

  Issue of Certificate of shares, etc.

113

Limitation of time for issue of certificates

 

  share warrants

114

Issue and effect of share warrants to bearer

115

share warrants and entries in register of members

 

  Penalty for personation of shareholder

116

Penalty for personation of shareholder

 

  Special provisions as debentures

117

Debentures with voting rights not to be issued hereafter

117A

Debenture trust deed

117B

Appointment of debenture trustees and duties of debenture trustees

117C

Liability of company to create security and debenture redemption reserve

118

Right to obtain copies of and inspect trust deed

119

Liability of trustees for debenture holders

120

Perpetual debentures

121

Power to re-issue redeemed debentures in certain cases

122

Specific performance of contract to subscribe for debentures

123

Payments of certain debts out of assets subject to floating charge in priority to claims under the charge

Part V

Registration Of Charge

124

Charge to include mortgage in this Part

125

Certain charges to be void against liquidator or creditors unless registered

126

Date of notice of charge

127

Registration of charges on properties acquired subject to charge

128

Particulars in case of series of debentures entitling holders pari passu

129

Particulars in case of commission, etc., on debentures

130

Register of charges to be kept by Registrar

131

Index to register of charges

132

Certificate of registration

133

Endorsement of certificate of registration on debenture or certificate of debenture stock

134

Duty of company as regards registration and right of interested party

135

Provisions of Part to apply to modification of charges

136

Copy of instrument creating charge to be kept by company at registered office

137

Entry in register of charges of appointment of receiver or manager

138

Company to report satisfaction and procedure thereafter

139

Power of Registrar to make entries of satisfaction and release in absence of intimation from company

140

Copy of memorandum of satisfaction to be furnished to company

141    

Rectification by Company Law Board of register of charges

142    

Penalties

143    

Company's register of charges

144

Right to inspect copies of instruments creating charges and company's register of charges

145

Application of Part to charges requiring registration under it but not under previous law

Part VI

Management And Administration

Chapter I  

General Provision

 

  Registered Office and Name

146

Registered office of company

147

Publication of name by company

148

Publication of authorized as well as subscribed and paid-up capital

 

  Restrictions on Commencement of Business

149

Restrictions on commencement of business

 

  Registers of Members and Debentures-holders

150

Register of members

151

Index of members

152

Register and index of debenture holders

152A

Register and index of beneficial owners to be of debenture-holders

153

Trust not to be entered on register

153A

Appointment of public trustee

153B

Declaration as to shares and debentures held in trust

154

Power to close register of members or debenture holders

155

[Omitted]

156

[Omitted]

 

  Foreign Registers of Members or debenture-holders

157

Power for company to keep foreign register of members or debenture holder

158

Provisions as to foreign registers

 

  Annual Returns

159

Annual return to be made by company having a share capital

160

Annual return to be made by company not having a share capital

161

Further provisions regarding annual return and certificate to be annexed thereto

162

Penalty and interpretation

 

  General Provisions regarding Registers and Returns

163

Place of keeping, and inspection of, registers and returns

164

Registers, etc., to be evidence

 

  Meetings and Proceedings

165

Statutory meeting and statutory report of company

166

Annual general meeting

167

Power of Company Law Board to call annual general meeting

168

Penalty for default in complying with section 166 or 167

169

Calling of extra1ordinary general meeting on requisition

170

Sections 171 to 186 to apply to meetings

171

Length of notice for calling meeting

172

Contents and manner of service of notice and persons on whom it is to be served

173

Explanatory statement to be annexed to notice

174

Quorum for meeting

175

Chairman of meeting

176

Proxies

177

Voting to be by show of hands in first instance

178

Chairman's declaration of result of voting by show of hands to be conclusive

179

Demand for poll

180

Time of taking poll

181

Restriction on exercise of voting right of members who have not paid calls, etc

182

Restrictions on exercise of voting right in other cases to be void

183

Right of member to use his votes differently

184

Scrutinizers at poll

185

Manner of taking poll and result thereof

186

Power of Company Law Board to order meeting to be called

187

Representation of corporations at meetings of companies and of creditors

187A

Representation of the President and Governors in meetings of companies of whch they are members

187B

Exercise of voting rights in respect of shares held in trust

187C

Declaration by persons not holding beneficial interest in any share

187D

Investigation of beneficial ownership of shares in certain cases

188

Circulation of members' resolutions

189

Ordinary and special resolutions

190

Resolutions requiring special notice

191

Resolutions passed at adjourned meetings

192

Registration of certain resolutions and agreements

192A

Passing of resolutions by postal ballot

193

Minutes of proceedings of general meetings and of Board and other meeting

194

Minutes to be evidence

195

Presumptions to be drawn where minutes duly drawn and signed

196

Inspection of minute books of general meetings

197

Publication of reports of proceedings of general meetings

 

  Prohibition of simultaneous appointment of different categories of managerial personnel

197A

Company not to appoint or employ certain different categories of managerial personnel at the same time

 

  Managerial remuneration, etc.

198

Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits

199

Calculation of commission, etc., in certain cases

200

Prohibition of tax-free payments

201

Avoidance of provisions relieving liability of officers and auditors of company

 

  Prevention of management by undesirable persons

202

Undercharged insolvent not to manage companies

203

Power to restrain fraudulent persons from managing companies

 

  Action on appointment of firms and bodies corporate to offices

204

Restriction on appointment of firm or body corporate to office or place of profit under a company

204A

[Omitted]

 

  idends and manner and time of payment thereof

205

idend to be paid only out of profits

205A

Unpaid idend to be transferred to special idend account

205B

Payment of unpaid or unclaimed idend

205C

Establishment of Investor Education and Protection Fund

206

idend not to be paid except to registered shareholders or to their order or to their bankers

206A

Right to idend, rights shares, and bonus shares to be held in abeyance pending registration of transfer of shares

207

Penalty for failure to distribute idends within forty-two days

 

  Payments of interest out of capital

208

Power of company to pay interest out of capital in certain cases

 

  Accounts      

209

Books of account to be kept by company

209A

Inspection of books of account, etc., of companies

210

Annual accounts and balance sheet

210A

Constitution of National Advisory Committee on Accounting Standards

211

Form and contents of balance sheet and profit and loss account

212

Balance sheet of holding company to include certain particulars as to its subsidiaries

213

Financial year of holding company and subsidiary

214

Rights of holding company's representative and members

215

Authentication of balance sheet and profit and loss account

216

Profit and loss account to be annexed and auditors' report to be attached to balance sheet

217

Board's report

218

Penalty for improper issue, circulation or publication of balance sheet or profit and loss account

219

Right of members to copies of balance sheet and auditors' report

220    

Three copies of balance sheet, etc., to be filed with Registrar

221

Duty of officer to make disclosure of payments, etc

222

Construction of references to documents annexed to accounts

223

Certain companies to publish statement in the Form in Table F in schedule I

    

  Accounts      

224

Appointment and remuneration of auditors

224A

Auditor not to be appointed except with the approval of the company by special resolution in certain cases

225

Provisions as to resolutions for appointing or removing auditors

226

Qualifications and disqualifications of auditors

227

Powers and duties of auditors

228

Audit of accounts of branch office of compan

229

Signature of audit report, etc

230

Reading and inspection of auditor's report

231

Right of auditor to attend general meeting

232

Penalty for non-compliance with sections 225 to 231

233

Penalty for non-compliance by auditor with sections 227 and 229

233A

Power of Central Government to direct special audit in certain cases

233B

Audit of cost accounts in certain cases

 

  Power of Registrar to call for information, etc.

234

Power of Registrar to call for information or explanation

234A

Seizure of documents by Registrar

 

  Investigation

235

Investigation of the affairs of a company

236

Application by members to be supported by evidence and power to call for security

237

Investigation of company's affairs in other cases

238

Firm, body corporate or association not to be appointed as inspector

239

Power of inspectors to carry investigation into affairs of related companies, etc

240

Production of documents and evidence

240A

Seizure of documents by inspector

241

Inspectors' report

242

Prosecution

243

Application for winding up of company or an order under section 397 or 398

244

Proceedings for recovery of damages or property

245

Expenses of investigation

246

Inspectors' report to be evidence

247

Investigation of ownership of company

248

[Omitted]

249

[Omitted]

250

Imposition of restrictions upon shares and debentures and prohibition of transfer of shares or debentures in certain cases

250A

Voluntary winding up of company, etc., not to stop investigation proceedings

251

Saving for legal advisers and bankers

Chapter II

Directors

 

  Constitution of Board of Directors

252

Minimum number of directors

253

Only iniduals to be directors

254

Subscribers of memorandum deemed to be directors

255

Appointment of directors and proportion of those who are to retire by rotation

256

Ascertainment of directors retiring by rotation and filling of vacancies

257

Right of persons other than retiring directors to stand for directorship

258

Right of company to increase or reduce the number of directors

259

Increase in number of directors to require Government sanction

260

Additional directors

261

[Omitted]

262

Filling of casual vacancies among directors

263

Appointment of directors to be voted on inidually

263A

Sections 177, 255, 256 and 263 not to apply in relation to companies not carrying business for profit, etc

264

Consent of candidate for directorship to be filed with the company and consent to act as director to be filed with the Registrar

265

Option to company to adopt proportional representation for the appointment of directors

266

Restrictions on appointment or advertisement of director

 

  Managing Directors, etc.

267

Certain persons not to be appointed managing directors

268

Amendment of provision relating to managing, whole time or non-rotational directors to require Government approval

269

Appointment of managing or whole-time director or manager to require Government approval only in certain cases

 

  share qualification

270

Time within which share qualification is to be obtained and maximum amount thereof

271

[Omitted]

272

Penalty

273

Saving

 

  Disqualifications of Directors

274

Disqualifications of directors

 

  Restrictions on number of Directorship

275

No person to be a director of more than twenty companies

276

Choice to be made by director of more than twenty companies at commencement of Act

277

Choice by person becoming director of more than twenty companies after commencement of Act

278

Exclusion of certain directorships for the purposes of sections 275, 276 and 2

279

Penalty

 

  Retiring Age of Directors

280

[Omitted]

281

[Omitted]

282

[Omitted]

 

  Vacation of Office by Directors

283

Vacation of office by directors

284

Removal of directors

 

  Meeting of Board

285

Board to meet at least once in every three calendar months

286

Notice of meetings

287

Quorum for meetings

288

Procedure where meeting adjourned for want of quorum

289

Passing of resolutions by circulation

290

Validity of acts of directors

 

  Board's Powers and Restrictions thereon

291

General powers of Board

292

Certain powers to be exercised by Board only at meeting

292A

Audit Committee

293

Restrictions on powers of Board

 

  Political contributions

293A

Prohibitions and restrictions regarding political contributions

293B

Power of Board and other persons to make contributions to the National Defense Fund, etc

 

  Appointment of Sole Selling Agents

294

Appointment of sole selling agents to require approval of company in general meeting

294A

Prohibition of payment of compensation to sole selling agents for loss of office in certain cases

294AA

Power of Central Government to prohibit the appointment of sole selling agents in certain cases

295

Loans to directors, etc

296

Application of section 295 to book debts in certain cases

297

Board's sanction to be required for certain contracts in which particular directors are interested

298

[Omitted]

 

  Procedure, etc. where Director interested

299

Disclosure of interests by director

300

Interested director not to participate or vote in Board's proceedings

301

Register of contracts, companies and firms in which directors are interested

302

Disclosure to members of director's interest in contract appointing manager, managing director

 

  Register of Directors, etc.

303

Register of directors etc

304

Inspection of the register

305

Duty of directors, etc., to make disclosure

306

Register to be kept by Registrar and inspection thereof

 

  Register of Director' shareholdings

307

Register of directors' shareholdings, etc

308

Duty of directors and persons deemed to be directors to make disclosure of shareholdings

 

  Remuneration of Directors

309

Remuneration of directors

310

Provisions for increase in remuneration to require Government sanction

311

Increase in remuneration of managing director on re-appointment or appointment after Act to require Government sanction

 

  Miscellaneous Provisions

312

Prohibition of assignment of office by director

313

Appointment and term of office of alternate directors

314

Director, etc., not to hold office or place of profit

315

[Omitted]

 

  Restrictions on Appointment of Managing Directors

316

Number of companies of which one person may be appointed managing director

317

Managing director not to be appointed for more than five years at a time

 

  Compensation for Loss of Office

318

Compensation for loss of office not permissible except to managing or whole-time directors or to directors who are managers

319

Payment to director, etc., for loss of office, etc., in connection with transfer of undertaking or property

320

Payment to director for loss of office, etc., in connection with transfer of shares

321

Provisions supplementary to sections 318, 319 and 320

 

  Directors with unlimited liability

322

Directors, etc., with unlimited liability in limited company

323

Special resolution of limited company making liability of directors, etc., unlimited

Chapter III

Managing Agents

 

  Prohibition of appointment of managing agent in certain cases

324

[Omitted]

324A

[Omitted]

325

[Omitted]

 

  Appointment and term of office

325A

[Omitted]

326

[Omitted]

327

[Omitted]

328

[Omitted]

 

  Variation of Managing agency agreement

329

[Omitted]

 

  Special provisions regarding existing managing agent

330

[Omitted]

331

[Omitted]

 

  Restrictions on number of managing agencies

332

[Omitted]

 

  Right to charge on assets

333

[Omitted]

 

  Vacation of office, removed and resignation

334

[Omitted]

335

[Omitted]

336

[Omitted]

337

[Omitted]

338

[Omitted]

339

[Omitted]

340

[Omitted]

341

[Omitted]

342

[Omitted]

 

  Transfer of, and succession to, office

343

[Omitted]

344

[Omitted]

345

[Omitted]

 

  Changes in constitution of firms and corporations

346

[Omitted]

347

[Omitted]

 

  Remuneration of managing agents

348

[Omitted]

349

Determination of net profits

350

Ascertainment of depreciation

351

[Omitted]

352

[Omitted]

353

[Omitted]

354

[Omitted]

355

Saving.

 

  Appointments as selling and buying agents

356

[Omitted]

357

[Omitted]

358

[Omitted]

359

[Omitted]

360

[Omitted]

361

[Omitted]

362

[Omitted]

363

[Omitted]

 

  Assignment of, or charge on, remuneration

364

[Omitted]

 

  Compensation for termination of office

365

[Omitted]

366

[Omitted]

 

  Other rights and liabilities not affected on termination of office

367

[Omitted]

 

  Restrictions on powers

368

[Omitted]

369

[Omitted]

370

Loans, etc., to companies under the same management

370A

Provisions as to certain loans which could not have been made if sections 369 and 370 were in force

371

Penalty for contravention of section 369, 370 or 370A

372

Purchase by company of shares, etc., of other companies

372A

Inter-corporate loans and investments

373

Investments made before commencement of Act

374

Penalty for contravention of section 372 or 373

375

[Omitted]

376

Condition prohibiting reconstruction or amalgamation of company except on continuance of managing agent, etc., to be void

377

[Omitted]

Chapter IV    

A. Secretaries and Treasurers

378

[Omitted]

379

[Omitted]

380

[Omitted]

381

[Omitted]

382

[Omitted]

383

[Omitted]

383A

Certain companies to have secretaries

 

  B. Managers

384

Firm or body corporate not to be appointed manager

385

Certain persons not to be appointed managers

386

Number of companies of which a person may be appointed manager

387

Remuneration of manager

388

Application of sections 269, 310, 311, 312 and 317 to managers

388A

Sections 386 to 388 not to apply to certain private companies

Chapter IV A

Powers of Central Government to remove managerial personnel from office on the recommendation of Company Law Board.

388B

Reference to Company Law Board of cases against managerial personnel

388C

Interim order by Company Law Board

388D

Decision of the Company Law Board

388E 

Power of Central Government to remove managerial personnel on the basis of Company Law Board's decision

Chapter V

Arbitration, Compromises, Arrangements and Reconstructions.

389

Repealed by Act 65 of 1960

390

Interpretation of sections 391 and 393

391

Power to compromise or make arrangements with creditors and members

392

Power of High Court to enforce compromises and arrangements

393

Information as to compromises or arrangements with creditors and members

394

Provisions for facilitating reconstruction and amalgamation of companies

394A

Notice to be given to Central Government for applications under sections 391 and 394

395

Power and duty to acquire shares of shareholders dissenting from sheme or contract approved by majority

396

Power of Central Government to provide for amalgamation of companies in national interest

396A

Preservation of books and papers of amalgamated company

Chapter VI    

Prevention of Oppression and mismanagement

 

  A-Powers of Company Law Board 

397

Application to Company Law Board for relief in cases of oppression

398

Application to Company Law Board for relief in cases of mismanagement

399

Right to apply under sections 397 and 398

400

Notice to be given to Central Government of applications under sections 397 and 398

401

Right of Central Government to apply under sections 397 and 398

402

Powers of Company Law Board on application under section 397 or 398

403

Interim order by Company Law Board

404

Effect of alteration of memorandum or articles of company by order under section 397 or 398

405

Addition of respondents to application under section 397 or 398

406

Application of sections 539 to 544 to proceedings under sections 397 and 398

407

Consequences of termination or modification of certain agreements

 

  B-Powers of Central Government

408

Powers of Government to prevent oppression or mismanagement

409

Power of Company Law Board to prevent change in Board of directors likely to affect company prejudiciall

Chapter VII

Constitution and Powers of Advisory Committee

410

Appointment of Advisory Committee

411

[Omitted]

412

[Omitted]

413

[Omitted]

414

[Omitted]

415

[Omitted]

Chapter VIII

Constitution and Powers of Advisory Committee

 

Contracts where Company is undisclosed Principal

416

Contracts by agents of company in which company is undisclosed principal. Employees' Securities and Provident Funds

417

Employees' securities to be deposited in post office savings bank or scheduled Bank

418

Provisions applicable to provident funds of employees

419

Right of employee to see bank's receipt for moneys or securities referred to in section 417 or 418

420

Penalty for contravention of sections 417, 418 and 419

 

Receivers and Managers

421

Filing of accounts of receivers

422

Invoices, etc., to refer to receiver where there is one

423

Penalty for non-compliance with sections 421 and 422

424

Application of sections 421 to 423 to receivers and managers appointed by Court and managers appointed in pursuance of an instrument

Part VII

Winding Up

Chapter I

Preliminary

 

Modes of Winding up

425

Modes of winding up

 

Contributories

426

Liability as contributories of present and past members

427

Obligations of directors and managers whose liability is unlimited

428

Definition ofcontributory

429

Nature of liability of contributory

430

Contributories in case of death of member

431

Contributories in case of insolvency of member

432

Contributories in case of winding up of a body corporate which is a member

Chapter II  

Winding up by the Court

 

Cases in which Company may Wound up by the Court

433    

Circumstances in which company may be wound up by Court

434    

Company when deemed unable to pay its debts

 

Transfer of Proceedings

435

Transfer of winding up proceedings to District Court

436

Withdrawal and transfer of winding up from one District Court to another

437

Power of High Court to retain winding up proceedings in District Court

438

Jurisdiction of High Court under sections 435, 436 and 437 to be exercised at any time and at any stage

 

Petition for Winding up

439

Provisions as to applications for winding up

440

Right to present winding up petition where company is being wound up voluntarily or subject to Courts supervision

 

Commencement of Winding up

441

Commencement of winding up by Court

 

Powers of Court

442

Power of Court to stay or restrain proceedings against company

443

Powers of Court on hearing petition

 

Consequences of Winding up Order

444

Order for winding up to be communicated to Official Liquidator and Registrar

445

Copy of winding up order to be filed with Registrar

446

Suits stayed on winding up order

447

Effect of winding up order

448

Appointment of Official Liquidator

449

Official Liquidator to be liquidator

450

Appointment and powers of provisional liquidator

451

General provisions as to liquidators

452

Style, etc., of liquidator

453

Receiver not to be appointed of assets with liquidator

454

Statement of affairs to be made to Official Liquidator

455

Report by Official Liquidator

456

Custody of company's property

457

Powers of liquidator

458

Discretion of liquidator

458A

Exclusion of certain time in computing periods of limitation

459

Provision for legal assistance to liquidator

460

Exercise and control of liquidator's powers

461

Books to be kept by liquidator

462

Audit of liquidator's accounts

463

Control of Central Government over liquidators

 

Committee of Inspection

464

Appointment and composition of committee of inspection

465

Constitution and proceedings of committee of inspection

 

General Powers of Court in case of Winding up by Court

466

Power of Court to stay winding up

467

Settlement of list of contributories and application of assets

468

Delivery of property to liquidator

469    

Payment of debts due by contributory and extent of set-off

470

Power of Court to make calls

471

Payment into bank of moneys due to company

472

Moneys and securities paid into Bank to be subject to order of Court

473

Order on contributory to be conclusive evidence

474

Power to exclude creditors not proving in time

475

Adjustment of rights of contributories

476

Power to order costs

477

Power to summon persons suspected of having property of company, etc

478

Power to order public examination of promoters, directors, etc

479

Power to arrest absconding contributory

480

Saving of existing powers of Court

481

Dissolution of company

 

Enforcement of and Appeal from Orders

482

Order made in any Court to be enforced by other Courts

483

Appeals from orders

Chapter III

Voluntary Winding up

 

Resolutions for, and commencement of, voluntary winding up

484

Circumstances in which company may be wound up voluntarily

485

Publication of resolution to wind up voluntarily

486

Commencement of voluntary winding up

 

Consequences of Voluntary Winding up

487

Effect of voluntary winding up on status of company

 

Declaration of Solvency

488

Declaration of solvency in case of proposal to wind up voluntarily

 

Provisions applicable to a members' voluntary Winding up

489

Provisions applicable to a members' voluntary winding up

490

Power of company to appoint and fix remuneration of liquidators

491

Board's powers to cease on appointment of a liquidator

492

Power to fill vacancy in office of liquidator

493

Notice of appointment of liquidator to be given to Registrar

494

Power of liquidator to accept shares, etc., as consideration for sale of property of company

495

Duty of liquidator to call creditors' meeting in case of insolvency

496

Duty of liquidator to call general meeting at the end of each year

497

Final meeting and dissolution

498

Alternative provisions as to annual and final meetings in case of insolvency

 

Provisions applicable to a creditor's voluntary winding up

499

Provisions applicable to a creditor's voluntary winding up

500

Meeting of creditors

501

Notice of resolutions passed by creditors' meeting to be given to Registrar

502

Appointment of liquidator

503

Appointment of committee of inspection

504

Fixing of liquidators' remuneration

505

Board's powers to cease on appointment of liquidator

506

Power to fill vacancy in office of liquidator

507

Application of section 494 to a creditors' voluntary winding up

508

Duty of liquidator to call meetings of company and of creditors at end of each year

509

Final meeting and dissolution

 

Provisions applicable to every voluntary winding up

510

Provisions applicable to every voluntary winding up

511

Distribution of property of company

511A

Application of section 454 to voluntary winding up

512

Powers and duties of liquidator in voluntary winding up

513

Body corporate not to be appointed as liquidator

514

Corrupt inducement affecting appointment as liquidator

515

Power of Court to appoint and remove liquidator in voluntary winding up

516

Notice by liquidator of his appointment

517

Arrangement when binding on company and creditors

518

Power to apply to Court to have questions determined or powers exercised

519

Application of liquidator to Court for public examination of promoters, directors, etc

520

Costs of voluntary winding up

521

Repealed by Act 65 of 1960

Chapter   IV

Winding subject to supervision of Court

522

Power to order winding up subject to supervision

523

Effect of petition for winding up subject to supervision

524

Power of Court to appoint or remove liquidators

525

Powers and obligations of liquidator appointed by court

526

Effect of supervision order

527

Appointment in certain cases of voluntary liquidators to office of liquidators

Chapter   V 

Provision applicable to every mode of winding up

 

Proof and ranking of claims

528

Debts of all descriptions to be admitted to proof

529

Application of insolvency rules in winding up of insolvent companies

529A

Overriding preferential payments

530

Preferential payments

 

Effect of winding up Antecedent and other Transactions

531

Fraudulent preference

531A

Avoidance of voluntary transfer

532

Transfers for benefit of all creditors to be void

533

Liabilities and rights of certain fraudulently preferred persons

534

Effect of floating charge

535

Disclaimer of onerous property in case of a company which is being wound up

536

Avoidance of transfers, etc., after commencement of winding up

537

Avoidance of certain attachments, executions, etc., in winding up by or subject to supervision of Court

 

Offences antecedent to or in course of winding up

538

Offences by officers of companies in liquidation

539

Penalty for falsification of books

540

Penalty for frauds by officers

541

Liability where proper accounts not kept

542

Liability for fraudulent conduct of business

543

Power of Court to assess damages against delinquent directors, etc.

544

Liability under sections 542 and 543 to extend to partners or directors in firm or company

545

Prosecution of delinquent officers and members of the company

 

Miscellaneous provisions

546

Liquidator to exercise certain powers subject to sanction

547

Notification that a company is in liquidation

548

Books and papers of company to be evidence

549

Inspection of books and papers by creditors and contributories

550

Disposal of books and papers of company

551

Information as to pending liquidations

552

Official Liquidator to make payments into the public account of India India

553

Voluntary liquidator to make payments into scheduled Bank

554

Liquidator not to pay moneys into private banking account

555

Unpaid idends and undistributed assets to be paid into the Companies Liquidation Account

556

Enforcement of duty of liquidator to make returns, etc

 

Supplementary Powers of Court

557

Meetings to ascertain wishes of creditors or contributories

558

Court or person before whom affidavit may be sworn

 

Provision as to dissolution

559

Power of Court to declare dissolution of company void

560

Power of Registrar to strike defunct company off register

PART VIII

Application Of Act To Companies Formed Or Registsered Under Previous Companies Laws

561

Application of Act to companies formed and registered under previous companies laws

562

Application of Act to companies registered but not formed under previous companies laws

563

Application of Act to unlimited companies registered under previous companies laws

564

Mode of transferring shares in the case of companies registered under Acts 19 of 1857 and 7 of 1860

Part   IX      

Companies Autorised To Register Under   This Act

565

Companies capable of being registered

566

Definition ofjoint-stock company

567

Requirements for registration of joint-stock companies

568

Requirements for registration of companies not being joint-stock companies

569

Authentication of statements of existing companies

570

Power of Registrar to require evidence as to nature of company

571

Notice to customers on registration of banking company with limited liability

572

Change of name for purposes of registration

573

Addition ofLimited orPrivate Limited to name

574

Certificate of registration of existing companies

575

Vesting of property on registration

576

Saving for existing liabilities

577

Continuation of pending legal proceedings

578

Effect of registration under Part

579

Power to substitute memorandum and articles for deed of settlement

580

Power of Court to stay or restrain proceedings

581

Suits stayed on winding up order

Part X   

Winding Up Of Unregistered Companies

582

Meaning ofunregistered company

583

Winding up of unregistered companies

584

Power to wind up foreign companies, although dissolved

585

Contributories in winding up of unregistered company

586

Power to stay or restrain proceedings

587

Suits, etc., stayed on winding up order

588

Directions as to property in certain cases

589

Provisions of Part cumulative

590

Saving and construction of enactments conferring power to wind up partnership, association or company in certain cases

Part XI

Companies Incorporated Outside India

 

Provisions as to establishment of place of business in India

591

Application of sections 592 to 602 to foreign companies

592

Documents, etc., to be delivered to Registrar by foreign companies carrying on business in India

593

Return to be delivered to Registrar by foreign company where documents, etc., altered

594

Accounts of foreign company

595

Obligation to state name of foreign company, whether limited, and country where incorporated

596

Service on foreign company

597

Office where documents to be delivered

598

Penalties

599

Company's failure to comply with Part not to affect its liability under contracts, etc

600

Registration of charges, appointment of receiver and books of account

601

Fees for registration of documents under Part

602

Interpretation of foregoing sections of Part

 

Prospectuses

603

Dating of prospectus and particulars to be contained therein

604

Provisions as to expert's consent and allotment

605

Registration of prospectus

605A

Offer of Indian Depository Receipts

606

Penalty for contravention of sections 603, 604 and 605

607

Civil liability for mis-statements in prospectu

608

Interpretation of provisions as to prospectuses

Part   XII     

Registration Offices And Officers And Fees

609  

Registration offices

610

Inspection, production and evidence of documents kept by Registrar

610A

Admissibility of micro films, facsimile copies of documents, computer printouts and documents on computer media as documents and as evidence

611  

Fees in schedule-X to be paid

612

Fees, etc., paid to Registrar and other officers to be accounted for to Central Government

613

Power of Central Government to reduce fees, charges, etc

614

Enforcement of duty of company to make returns, etc., to Registrar

614A

Power of Court trying offences under the Act to direct the filing of documents with Registrar

Part   XIII 

General

 

Collection of Information and Statistics from companies

615

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

 

Application of Act to Companies Governed by Special Acts

616

Application of Act to insurance, banking, electricity supply and other companies governed by special Acts

 

Application of Act to Government Companies

617      

Definition ofGovernment Company

618

[Omitted]

619

Application of sections 224 to 233 to Government companies

619A

Annual reports on Government companies

619B

Provisions of section 619 to apply to certain companies

620

Power to modify Act in relation to Government companies

 

Modification of Act its Application to Nidhis and Mutual Benefits

620A

Power to modify Act in its application to Nidhis, etc

620B

Special provisions as to companies in Goa, Daman and Diu

 

Special Provisions as to Companies in Jammu and Kashmir

620C  

Special provisions as to companies in Jammu and Kashmir

 

Offences

621

Offences against Act to be cognizable only on complaint by Registrar, shareholder or Government

621A

Composition of certain offences

622

Jurisdiction to try offences

623

Certain offences triable summarily in Presidency towns

624

Offences to be non-cognizable

624A

Power of Central Government to appoint company prosecutors

624B

Appeal against acquittal

625

Payment of compensation in cases of frivolous or vexatious prosecution

626

Application of fines

627

Production and inspection of books where offence suspected

628

Penalty for false statements

629

Penalty for false evidence

629A

Penalty where no specific penalty is provided elsewhere in the Act

630

Penalty for wrongful withholding of property

631

Penalty for improper use of wordsLimited andPrivate Limited

 

Legal Proceedings

632

Power to require limited company to give security for costs

633

Power of Court to grant relief in certain cases

634

Enforcement of orders of Courts

634A

Enforcement of orders of Company Law Board

635

Enforcement of orders of one Court by other Courts

635A

Protection of acts done in good faith

635AA

Non-disclosure of information in certain cases

 

Temporary Protection of employees

635B  

Protection of employees during investigation by inspector or pendency of proceeding before Court in certain cases

 

Reduction of fees payable to Company

636    

Reduction of fees, charges, etc., payable to company

 

Delegation of Powers and functions of Central Government

637

Delegation by Central Government of its powers and functions under Act

 

  Grant of Approval etc. subject to conditions and levy of fees on applications

637A

Powers of Central Government or Company Law Board to accord approval, etc., subject to conditions and to prescribe fees on applications

637AA

Power of Central Government to fix a limit with regard to remuneration

637B

Condonation of delays in certain cases

 

  Annual Report on Working of Act

638

Annual report by Central Government

639

Repealed by Act 65 of 1960

 

  Validation of registration of firms in certain cases

640

Validation of registration of firms as members of charitable and other companies

 

  Computation of time for filing orders of Court or the Company Law Board

640A

of time required in obtaining copies of orders of Court or the Company Law Board

 

  schedules, Forms and Rules

640B

Forms of, and procedure in relation to certain applications

641

Power to alter schedules

642

Power of Central Government to make rules

643

Power of Supreme Court to make rules

 

  Repeals and Savings

644

Repeal of Acts specified in schedule XII

645

Saving of orders, rules, etc., in force at commencement of Act

646

Saving of operation of section 138 of Act 7 of 1913

647

Saving of pending proceedings for winding up

648

Saving of prosecutions instituted by liquidator or Court under section 237 of Act 7 of 1913

649

Construction of references to former enactments in documents

650

Repealed by Act 65 of 1960

651

Construction of references to extraordinary resolution in articles etc

652

Appointment under previous companies laws to have effect as if made under Act

653

Former registration offices continued

654

Registers under previous company’s laws to be deemed to be part of registers under Act

655

Funds and accounts under Act to be in continuation of funds and accounts under previous companies laws

656

Saving of incorporation under repealed Acts

657

Saving of certain Tables under previous companies laws

658

Section 6 of the General Clauses Act, 1897 (10 of 1897) to apply in addition to sections 645 to 657 of Act

schedules

schedule I  

[See sections 2(2), 14, 28(1), 29 and 223] 

Table - A

Regulations for Management of a Company Limited by shares

Table - B     

Memorandum of Association of a Company Limited by shares

Table– C            

Memorandum and Articles of Association of a Company Limited by Guarantee and not having a share Capital

Table - D    

Memorandum and Articles of Association of a Company Limited by Guarantee and having a share Capital

Table  - E    

Memorandum and Articles of Association of an Unlimited Company

Table - F     

Form of Statement to be Published by Limited Banking Companies, Insurance Companies and Deposit, provident or Benefit Societies

schedule IA

List of Relatives

schedule II

Matters to be specified in prospectus and reports to be set out therein

Part - I

Matters to be specified

Part  - II

Reports to be set out

Part - III

Provisions applying to Parts I and II of the schedule

schedule III

Form of Statement in lieu of Prospectus to be delivered to Register by a Company which does not issue a Prospectus or which does not go to allotment on a prospectus issued, and reports to be set out therein

Part - I

Form of Statement and particulars to be contained therein

Part - II

Reports to be set out

Part - III

Provisions applying to Parts  I and II of this schedule

schedule IV

Form of Statement in lieu of prospectus to be delivered to Registrar  by a private company on becoming a public company and reports to be set out therein

Part - I

Form of statement and particulars to be contained therein

Part – II

Reports to be set out

Part - III

Provisions applying to Parts I and II of this schedule

schedule V

Contents and form of Annual Return of a company having a share capital

Part – I

Contents

Part – II

Form

schedule VI

 [See section 211]

Part – I

Form of Balance-sheet

          A

horizontal Form

          B

Vertical Form

Part - II

Requirements as to Profit and Loss Account

Part - III

Interpretation

Part - IV

Balance sheet Abstract and Company's General Business Profile

schedule VII

[Redundant after abolition of the system of managing agents, secretaries and treasures by Act 17 of 1969, w.e.f. 3-4-1970]

schedule VIII

[Redundant after abolition of the system of managing agents, secretaries and treasures by Act 17 of 1969, w.e.f. 3-4-1970]

schedule IX

Form of Proxy

schedule X

Table of fees to be paid to the Registrar

schedule XI

Form in which sections 539 to 544 of Act are to apply to cases where an application is made under section 397 or 398

schedule XII

Enactments repealed

schedule XIII

Conditions to be fulfilled for the appointment of a managing or whole-time director or a manager without the approval of the Central Government

Part - I 

Appointments

Part – II

Remuneration

Part – III

Provisions applicable to Parts I and II of this schedule

schedule XIV

Rates of depreciation

schedule XV

Under Section 108B(2)(b)

Preamble

Act No.1 of 1956

[18th January, 1956]

An Act to consolidate and amend the law relating to companies and certain other associations.

Comment: This is the basic law which governs the creation, continuation, the winding up of companies and also the relationships between the shareholders, the company, the public and the government. Coupled with other statutes dealing with corporate entities, this is an extremely important piece of legislation.

 Be it enacted by Parliament in the Sixth Year of the Republic of India as follows :—



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