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Query- Corporate Law

Jeet Biswas (ACMA (in Service)) (5073 Points)

19 February 2008

In many questions of Corporate Law portion, two aspects have been depicted. one of the Companies Act and another of the SEBI guidelines.
FOR Eg.,
In case of Non-reciept of MINIMUM SUBSCRIPTION,
The Companies Act asks the company to refund the entire Subs. amount within the next 10 days, after the expiry of 120 days of the issue of prospectus. Otherwise, the Co. will be liable to pay Interest @ 6%p.a w.e.f the 130th day.

Whereas, the SEBI guidelines direct the Co. to refund the amount within the next 10 days, if it fails to recieve the Minimum Subs. within 60 days of the Closure of Issue. Failing which, interest @ 15%p.a. will be payable aftr the expiry of the 70th(60+10) day.

Are both the facets necessary while answering the questions, or only the Companies Act's criteria matters in the exams......?

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4 Replies

S.Srinivasaraghavan (Chief Financial Officer and Co) (11318 Points)
Replied 19 February 2008

What is stated in the companies Act is the personal liability of directors, jointly and severally. That apart, SEBI stipulation will also come into play

Sonia Verma (state govt employee) (347 Points)
Replied 19 February 2008

But what about the 5-marks questions which are asked normally in the law paper? do they require both the point of views?

CA SASHIKANT PATI (Job) (159 Points)
Replied 20 February 2008

Then what would be our conclusion on refund of subs. amount.

Jeet Biswas (ACMA (in Service)) (5073 Points)
Replied 21 February 2008

SEBI guidelines are more binding on Co.'s now, so most probably SEBI's aspect shall b kept in consideration. BUT that was just an example i gave. The query remains unresolved. i.e how much to write in a 5-mark question..? In exam point of view, are SEBI guidelines important? or only Companies Act concerns the examiners????