CS. Devendra V Deshpande
Legal issues
 Act – Procedure is set and is known to all
 Rules – Act has given power S. 469
 Notification – Act has given power S. 462
 Removal of Difficulties Order – Act has given power –
S. 470
 Exemptions given
 Circulars - ?
 Secretarial Standards
Legal issues
 administrative decision – MCA – Ministry
 legislative act - House of Parliament
 What can not be done directly can not be done
indirectly
 Can MCA issue circulars and whether they are
binding?
Concepts
 Company and Body Corporate
 Articles of Association
 Associate Company
 CEO, CFO AND KMP
 Control
 Financial Statements – Cash Flow, CARO 2016
 Financial Year
Concepts
 Holding Company
 Interested Director
 Key Managerial Personnel
 Listed Company
 Managing Director
 OPC
 Private Limited Company
Concepts
 Promoter
 Public Company and Deemed public Company
 Related Party
 Small Company
 Subsidiary Company / Subsidiary
 Whole time Director
Tricky issues
Can an existing Company carry out the activities
from Other Objects?
VIEW 1
VIEW 2
Section 6 (a) Provision contrary to Act
are void.
Section 4(1) (c) Objects and ancillary
objects
Section 4 (6) In format specified
No Saving Provision
Section 465 (2) Documents executed
continue to remain valid
465 is not enacted yet.
Refer to Section 645 of Companies Act
1956
Definition of previous Law
Tricky issues
Whether all the Companies are required to alter the
Articles of Association of the Company?
VIEW 1
VIEW 2
Section 6 (a) Provision contrary to Act
are void.
Section 5 (6) Specified Forms
Rule 11 – Can be adopted in totality or
otherwise
Section 465 (2) Documents executed
continue to remain valid
465 is not enacted yet.
Refer to Section 645 of Companies Act
1956
Definition of previous Law
Tricky issues
What is the effective date for alteration of
Memorandum of Association of the Company?
VIEW 1
VIEW 2
Section 13 (10): Effective date is
registration of Documents
Section 13 (1): Save as provided in
Section 61
Tricky issues
Bonus issue requires an Ordinary Resolution or Special
Resolution ?
VIEW 1
VIEW 2
Section 63 (2) (b) Requires
Authorisation by General Meeting
Form PAS 3 – 5 (e) Date of passing
special resolution
Tricky issues
 What is the percentage of buy back?
 What is completion of Buy Back?
 PAID UP: 100 Shares of 10 each = 1000/ Free Reserve: 1000 / Total consideration Rs. 40/- per share, Buy Back of 15
shares.
 What is a requirement – Board or General Meeting
Resolution
Tricky issues
 Can debentures be issued convertible into redeemable
preference share?
 Convertible in shares
 Share include Equity and Preference
Tricky issues
 Whether the definition of deposit has to be
constructed in a way that if any amount is exempted
under any one clause it will be exempted totally?
 Eg: An amount received as a Share Application money
from a Company / Foreign National
Tricky issues
 Whether Charge is required to be created on flexi
deposit / loan against FD?
Tricky issues
 If AGM is convened on particular date which was
subsequently declared as National Holiday, what
would be the position?
Tricky issues
 Consolidation of Financial Statements?
 Only associate Companies?
 Intermediary holding Company?
 Foreign Subsidiaries
Tricky issues
 Issues related to CSR:
 A. Fund to be created?
 B. Carry forward?
 C. If loss in 1 year average?
 D. Section 450?
 E. 198 Calculation
Tricky issues
 Whether existing Internal Auditor can continue?
 What is the term of Appointment for Internal Auditor?
 What is the qualification of Internal Auditor?
Tricky issues
 Whether for first three years of cooling off period
appointment of Auditor can be for 1 year?
 Whether Form ADT 1 is required to be filed after
ratification?
Tricky issues
 Can the definition of Arms Length be borrowed from
Transfer pricing?
Tricky issues
 Can General Meeting be held by video conferencing?
Tricky issues
 Whether Investing the Funds in Fixed Deposits is
treated as Investment for Section 180 / 179 / 186?
Director related tricky issues
 Can a Director be appointed before obtaining DIN?
 An employee appointed as Director will become
Whole Time Director?
 Majority Independent Directors and rest are WTD or
MD based on contract who would retire ?
 Can independent Director be appointed by Board?
 12 months of non attendance to be calculated from
which date?
Tricky issues
 Allotment related tricky issues
 Private Placement V/s. Preferential Allotment
 Shares V/s. Securities
 Convertible V/s. Non Convertible
 Valuation and Income Tax aspects
 Issue of Debentures which are convertible into
preference shares
Questions, If any
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