[Act No.1 of 1956 dated 18th January, 1956]
1. Short title,
commencement and extent
30[2A. Interpretation
of certain words and expressions
3. Definitions of
"company", "existing company", "private company" and "public
company"
4. Meaning of "holding
company" and "subsidiary"
40[4A. Public
financial institutions
42[5.
Meaning of "officer who is in default"
8. Power of Central
Government to declare an establishment not to be a branch
office
9. Act to override
memorandum, articles, etc
[10D. Appeals
against decisions, etc., of the
Tribunal
46[PART IA: BOARD OF COMPANY LAW
ADMINISTRATION
10E. Constitution of
Board of Company Law Administration
56[10F. Appeals
against the orders of the Company Law Board
PART II: INCORPORATION
OF COMPANY AND MATTERS INCIDENTAL THERETO
11. Prohibition of
associations and partnerships exceeding certain
number
12. Mode of forming
incorporated company
13. Requirements with
respect to memorandums
15. Printing and
signature of memorandum
64A[17A. Change of registered office within a
State
18. Alteration to be
registered within three months
19. Effect of failure
to register
20. Companies not to
be registered with undesirable names
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
with "Limited" in name of charitable or other
company
26. Articles
prescribing regulations
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
32. Registration of
unlimited company as limited, etc
33. Registration of
memorandum and articles
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
42. Membership of
holding company
43. Consequences of
default in complying with conditions constituting a company a private
company
82[43A. Private company to become public
company in certain cases
47. Bills of exchange
and promissory notes
49. Investments of
company to be held in its own name
50. Power for company
to have official seal for use outside India
51. Service of
documents on company
52. Service of
documents on Registrar
53. Service of
documents on members by company
54. Authentication of
documents and proceedings
PART III: PROSPECTUS
AND ALLOTMENT, AND OTHER MATTERS RELATING TO ISSUE OF SHARES OR
DEBENTURES
95A[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
99[58A. Deposits not to be invited
without issuing an advertisement
58AAA. Default in
acceptance or refund of deposits to be cognizable
105[58B. Provisions relating to prospectus to
apply to advertisement
59. Penalty and
interpretation
60. Registration of
prospectus
61. Terms of contract
mentioned in prospectus or statement in lieu of prospectus, not to be
varied
62. Civil liability
for misstatements 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
108[68A. Personation for acquisition, etc., of
shares
108A[68B. Initial offer of securities to be in
dematerialised form in certain cases
69. Prohibition of
allotment unless minimum subscription received
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
134[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
78. Application of
premiums received on issue of
135[securities]
79. Power to issue
shares at a discount
134[79A. Issue of sweat equity
shares
80. Power to issue
redeemable preference shares
146[80A. Redemption of
irredeemable preference shares, etc.
82. Nature of shares
134[or debentures]
85. Two kinds of share
capital
155A[86. New issues of share capital to be
only of two kinds
89. Termination of
disproportionately excessive voting rights in existing
companies
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
158[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
100. Special
resolution for reduction of share capital
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.
160[106. Alteration of rights of holders of
special classes of shares
107. Rights of
dissentient shareholders
108. Transfer not to
be registered except on production of instrument of
transfer
170[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 he 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
173[109A. Nomination of
shares
174[111. Power to refuse registration and
appeal against refusal
169[111A.
Rectification of register on transfer
112. Certification of
transfers
113. Limitation of
time for issue of certificate
114. Issue and effect
of share warrants to bearer
115. Share warrants
and entries in register of members
116. Penalty for
personation of shareholder
117. Debentures with
voting rights not to be issued hereafter
178A[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
121. Power to re-issue
redeemed debentures in certain cases
122. Specific
performance of contract to subscribe for
debentures
PART V: REGISTRATION
OF CHARGES
124. "Charge" to
include mortgage in this Part
125. Certain charges
to be void against liquidator or creditors unless
registered
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
140. Copy of
memorandum of satisfaction to be furnished to
company
141. Rectification by
Company Law Board of register of charges
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
146. Registered office
of company
147. Publication of
name by company
148. Publication of
authorised as well as subscribed and paid-up
capital
149. Restrictions on
commencement of business
152. Register and
index of debenture holders
169[152A. Register and
index of beneficial owners to be of debenture
holder
153. Trusts not to he
entered on register
220[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
[Section 155 Omitted
by the Companies (Amendment) Act, 1988, with effect from 31st. May,
1991]
[Section 156 Omitted
by the Companies (Amendment) Act, 1988, with effect from 31st. May,
1991]
157. Power for company
to keep foreign register of members or debenture
holders
158. Provisions as to
foreign registers
159. Annual return to
be made by company having a share capital
160. Annual
return to be made by company not having a share
capital231
161. Further
provisions regarding annual return and certificate to be annexed
thereto
162. Penalty and
interpretation
163. Place of keeping,
and inspection of registers and returns
164. Registers, etc,.
to be evidence
165. Statutory meeting
and statutory report of company
167. Power of
249[Company Law Board] to call annual general
meeting
168. Penalty for
default in complying with section 166 or 167
169. Calling of
extraordinary 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
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
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
185. Manner of taking
poll and result thereof
An Act to consolidate and amend the law relating to companies and certain other associations
BE it enacted by Parliament in the Sixth Year of the Republic of India as follows: -
(1) This Act may be called the Companies Act, 1956.
(2) It shall come into force on such date1 as the Central Government may, by notification in the Official Gazette, appoint.
2[(3) It extends to the whole of India:]
3[***]
4[Provided 5[***] that it shall apply to the State of Nagaland subject to such modifications, if any, as the Central Government may, by notification in the Official Gazette, specify.]
In this Act, unless the context otherwise requires,-
6[(1) "abridged prospectus" means a memorandum containing such salient features of a prospectus as may be prescribed;]
6[(1A)] "alter" and "alteration" shall include the making of additions and omissions;
(2) "articles" means the articles of association of a company as originally framed or as altered from time to time in pursuance of any previous companies law or of this Act, including, so far as they apply to the company, the regulations contained, as the case may be, in Table B in the Schedule annexed to Act No. 19 of 1857 or in Table A in the First Schedule annexed to the Indian Companies Act, 1882, or in Table A in the First Schedule annexed to the Indian Companies Act, 1913, or in Table A in Schedule I annexed to this Act;
7[***]
(5) "banking company" has the same meaning as in the Banking Companies Act, 1949;9
(6) "Board of directors" or "Board", in relation to a company, means the Board of directors of the company;
(7) "body corporate" or "corporation" includes a company incorporated outside India but 10[does not include-
(a) a corporation sole;
(b) a co-operative society registered under any law relating to co-operative societies; and
(c) any other body corporate (not being a company as defined in this Act), which the Central Government may, by notification in the Official Gazette, specify in this behalf;]
(8) "book and paper" and "book or paper" include accounts, deeds, 11[vouchers,] writings, and documents;
12[(9) "branch office" in relation to a company means-
(a) any establishment described as a branch by the company; or
(b) any establishment carrying on either the same or substantially the same activity as that carried on by the head office of the company; or
(c) any establishment engaged in any production, processing or manufacture,
but does not include any establishment specified in any order made by the Central Government under section 8;]
(10) "company" means a company as defined in section 3;
13[10A "Company Law Board" means the Board of Company Law Administration constituted under section 10E;]
14[(11) "the Court" means,-
(a) with respect to any matter relating to a company (other than any offence against this Act), the Court having jurisdiction under this Act with respect to that matter relating to that company, as provided in section 10;
(b) with respect to any offence against this Act, the Court of a Magistrate of the First Class or, as the case may be, a Presidency Magistrate, having jurisdiction to try such offence;]
(12) "debenture" includes debenture stock, bonds and any other securities of a company, whether constituting a charge on the assets of the company or not;
8[(12A) "depository" has the same meaning as in the Depositories Act, 1996;
(12B) "derivative" has the same meaning as in clause (aa) of section 2 of the Securities Contracts (Regulation) Act, 1956;]
(13) "director" includes any person occupying the position of director, by whatever name called;
(14) "District Court" means the principal Civil Court of original jurisdiction in a district, but does not include a High Court in the exercise of its ordinary original civil jurisdiction;
8A[(14A) "dividend" includes any interim dividend;]
(15) "document" includes summons, notice, requisition, order, other legal process, and registers, whether issued, sent or kept in pursuance of this or any other Act or otherwise;
8B[(15A) "employees stock option" means the option given to the whole-time directors, officers or employees of a company, which gives such directors, officers or employees the benefit or right to purchase or subscribe at a future date, the securities offered by the company at a pre-determined price;]
(16) "existing company" means an existing company as defined in section 3;
(17) "financial year" means, in relation to any body corporate, the period in respect of which any profit and loss account of the body corporate laid before it in annual general meeting is made up, whether that period is a year or not:
Provided that, in relation to an insurance company, "financial year" shall mean the calendar year referred to in sub-section (1) of section 11 of the Insurance Act, 1938;
(18) "Government company" means a Government company within the meaning of section 617;
15[***]
(19) "holding company" means a holding company within the meaning of section 4;
8C[(19A) "hybrid" means any security which has the character of more than one type of security, including their derivatives;
(19B) "information memorandum" means a process undertaken prior to the filing of a prospectus by which a demand for the securities proposed to be issued by a company is elicited, and the price and the terms of issue for such securities is assessed, by means of a notice, circular, advertisement or document;]
16[(20) ***]
(21) "insurance company" means a company which carries on the business of insurance either solely or in conjunction with any other business or businesses;
(22) "issued generally" means, in relation to a prospectus, issued to persons irrespective of their being existing members or debenture holders of the body corporate to which the prospectus relates;
(23) " limited company" means a company limited by shares or by guarantee;
16A[(23A) "listed public companies" means a public company which has any of its securities listed in any recognised stock exchange;]
(24) "manager" means an individual (not being the managing agent) who, subject to the superintendence, control and direction of the Board of Directors, has the management of the whole, or substantially the whole, of the affairs of a company, and includes a director or any other person occupying the position of a manager, by whatever name called, and whether under a contract of service or not;
20[***]
(26) "managing director" means a director who, by virtue of an agreement with the company or of a resolution passed by the company in general meeting or by its Board of directors or, by virtue of its memorandum or articles of association, is entrusted within 18[substantial powers of management] which would not otherwise be exercisable by him, and includes a director occupying the position of a managing director, by whatever name called:
19[Provided that the power to do administrative acts of a routine nature when so authorised by the Board such as the power to affix the common seal of the company to any document or to draw and endorse any cheque on the account of the company in any bank or to draw and endorse any negotiable instrument or to sign any certificate of share or to direct registration of transfer of any share, shall not be deemed to be included within substantial powers of management:
Provided further that a managing director of a company shall exercise his powers subject to the superintendence, control and direction of its Board of directors;]
(27) "member", in relation to a company, does not include a bearer of a share-warrant of the company issued in pursuance of section 114;
(28) "memorandum" means the memorandum of association of a company as originally framed or as altered from time to time in pursuance of any previous companies law or of this Act;
(29) "modify" and "modification" shall include the making of additions and omissions;
22[(30) "officer" includes any director, manager or secretary or any person in accordance with whose directions or instructions the Board of directors or any one or more of the directors is or are accustomed to act;]
(31) "officer who is in default", in relation to any provision referred to in section 5, has the meaning specified in that section;
23[(31A) "option in securities" has the same meaning as in clause (d) of section 2 of the Securities Contracts (Regulation) Act, 1956;]
(32) "paid-up capital" or "capital paid-up" includes capital credited as paid-up;
(33) "prescribed" means, as respects the provisions of this Act relating to the winding up of companies except sub-section (5) of section 503, 24[sub-section (3) of section 550, section 552 and sub-section (3) of section 555], prescribed by rules made by the Supreme Court in consultation with High Courts, and as respects the other provisions of this Act including sub-section (5) of section 503, 25[sub-section (3) of section 550, section 552 and sub-section (3) of section 555], prescribed by rules made by the Central Government;
(34) "previous companies law" means any of the laws specified in clause (ii) of sub-section (1) of section 3;
(35) "private company" means a private company as defined in section 3;
(36) "prospectus" means 26[any document described or issued as a prospectus and includes any] notice, circular, advertisement or other document 17[inviting deposits from the public or] inviting offers from the public for the subscription or purchase of any shares in, or debentures of, a body corporate;
(37) "public company" means a public company as defined in section 3;
(38) "public holiday" means a public holiday within the meaning of the Negotiable Instruments Act, 1881:
Provided that no day declared by the Central Government to be a public holiday shall be deemed to be such a holiday, in relation to any meeting, unless the declaration was notified before the issue of the notice convening such meeting;
(39) "recognised stock exchange" means, in relation to any provision of this Act in which it occurs, a stock exchange, whether in or outside India, which is notified by the Central Government in the Official Gazette as a recognised stock exchange for the purposes of that provision;
(40) "Registrar" means a Registrar, or an Additional, a Joint, a Deputy or an Assistant Registrar, having the duty of registering companies under this Act;
(41) "relative" means, with reference to any person, any one who is related to such person in any of the ways specified in section 6, and no others;
(42) "Schedule" means a Schedule annexed to this Act;
(43) "Scheduled Bank" has the same meaning as in the Reserve Bank of India Act, 1934;
26A[***]
27[(45) "secretary" means a Company Secretary within the meaning of clause (c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980, and includes any other individual possessing the 28[prescribed qualifications] and appointed to perform the duties which may be performed by a secretary under this Act and any other ministerial or administrative duties;]
29[(45A) "secretary in whole-time practice" means a secretary who shall be deemed to be in practice within the meaning of sub-section (2) of section 2 of the Company Secretaries Act, 1980, and who is not in full-time employment;]
29A[(45AA) "securities" means securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956, and includes hybrids;]
30[(45B) "Securities and Exchange Board of India" means the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992;]
(46) "share" means share in the share capital of a company, and includes stock except where a distinction between stock and shares is expressed or implied;
30A[(46A) "share with differential rights" means a share that is issued with differential rights in accordance with the provisions of section 86;]
(47) "subsidiary company" or "subsidiary" means a subsidiary company within the meaning of section 4:
(48) "total voting power", in regard to any matter relating to a body corporate, means the total number of votes which may be cast in regard to that matter on a poll at a meeting of such body, if all the members thereof and all other persons, if any, having a right to vote on that matter are present at the meeting, and cast their votes;
(49) "trading corporation" means a trading corporation within the meaning of entries 43 and 44 in List I in the Seventh Schedule to the Constitution;
31[***]
(50) "variation" shall include abrogation; and "vary" shall include abrogate.
Words and expressions used and not defined in this Act but defined in the Depositories Act, 1996 shall have the same meanings respectively assigned to them in that Act.]
(1) In this Act, unless the context otherwise requires, the expressions "company", "existing company", "private company" and "public company", shall, subject to the provisions of sub-section (2), have the meanings specified below,-
(i) "company" means a company formed and registered under this Act or an existing company as defined in clause (ii);
(ii) "existing company" means a company formed and registered under any of the previous companies laws specified below:-
(a) any Act or Acts relating to companies in force before the Indian Companies Act, 1866, and repealed by that Act;
(b) the Indian Companies Act, 1866;
(c) the Indian Companies Act, 1882;
(d) the Indian Companies Act, 1913;
(e) the Registration of Transferred Companies Ordinance, 1942; and
32[(f) any law corresponding to any of the Acts or the Ordinance aforesaid and in force-
(1) in the merged territories or in a Part B States (other than the State of Jammu and Kashmir), or any part thereof, before the extension thereto of the Indian Companies Act, 1913; or
(2) in the State of Jammu and Kashmir, or any part thereof, before the commencement of the Jammu and Kashmir (Extension of Laws) Act, 1956 33[in so far as banking, insurance and financial corporations are concerned, and before the commencement of the Central Laws (Extension to Jammu and Kashmir) Act, 1968 in so far as other corporations are concerned];] and
34[(g) the Portuguese Commercial Code 35[***] in so far as it relates to "sociedades anonimas";]
(iii) "private company" 35A[means a company which has a minimum paid-up capital of one lakh rupees or such higher paid-up capital as may be prescribed, and by its articles,—]
(a) restricts the right to transfer its shares, if any;
(b) limits the number of its members to fifty not including-
(i) persons who are in the employment of the company; and
(ii) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased; and
(c) prohibits any invitation to the public to subscribe for any shares in, or debentures of, the company:"
35B[(d) prohibits any invitation or acceptance of deposits from persons other than its members, directors or their relatives:]
Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this definition, be treated as a single member;
35C[(iv) "public company" means a company which—
(a) is not a private company;
(b) has a minimum paid-up capital of five lakh rupees or such higher paid-up capital, as may be prescribed;
(c) is a private company which is a subsidiary of a company which is not a private company;]
(2) Unless the context otherwise requires, the following companies shall not be included within the scope of any of the expressions defined in clauses (i) to (iv) of sub-section (1), and such companies shall be deemed, for the purposes of this Act, to have been formed and registered outside India:-
(a) a company the registered office whereof is in Burma, Aden or Pakistan and which immediately before the separation of that country from India was a company as defined in clause (i) of sub-section (1);
36[(b) ***]
36A[(3) Every private company, existing on the commencement of the Companies (Amendment) Act, 2000, with a paid-up capital of less than one lakh rupees, shall, within a period of two years from such commencement, enhance its paid-up capital to one lakh rupees.
(4) Every public company, existing on the commencement of the Companies (Amendment) Act, 2000, with a paid-up capital of less than five lakh rupees, shall within a period of two years from such commencement, enhance its paid-up capital to five lakh rupees.
(5) Where a private company or a public company fails to enhance its paid-up capital in the manner specified in sub-section (3) or sub-section (4), such company shall be deemed to be a defunct company within the meaning of section 560 and its name shall be struck off from the register by the Registrar.
(6) A company registered under section 25 before or after the commencement of Companies (Amendment) Act, 2000 shall not be required to have minimum paid-up capital specified in this section.]
(1) For the purposes of this Act, a company shall, subject to the provisions of sub-section (3), be deemed to be a subsidiary of another if, but only if, -
(a) that other controls the composition of its Board of directors; or
37[(b) that other-
(i) where the first-mentioned company is an existing company in respect of which the holders of preference shares issued before the commencement of this Act have the same voting rights in all respects as the holders of equity shares, exercises or controls more than half of the total voting power of such company;
(ii) where the first-mentioned company is any other company, holds more than half in nominal value of its equity share capital; or]
(c) the first-mentioned company is a subsidiary of any company which is that other's subsidiary.
Illustration
Company B is a subsidiary of company A, and company C is a subsidiary of company B. Company C is a subsidiary of company A, by virtue of clause (c) above. If company D is a subsidiary of company C, company D will be a subsidiary of company B and consequently also of company A, by virtue of clause (c) above, and so on.
(2) For the purposes of sub-section (1), the composition of a company's Board of directors shall be deemed to be controlled by another company if, but only if, that other company by the exercise of some power exercisable by it at its discretion without the consent or concurrence of any other person, can appoint or remove the holders of all or a majority of the directorships; but for the purposes of this provision that other company shall be deemed to have power to appoint to a directorship with respect to which any of the following conditions is satisfied, that is to say-
(a) that a person cannot be appointed thereto without the exercise in his favour by that other company of such a power as aforesaid;
(b) that a person's appointment thereto follows necessarily from his appointment as director, 21[***] or manager of, or to any other office or employment in, that other company; or
38[(c) that the directorship is held by an individual nominated by that other company or a subsidiary thereof.]
(3) In determining whether one company is a subsidiary of another-
(a) any shares held or power exercisable by that other company in a fiduciary capacity shall be treated as not held or exercisable by it;
(b) subject to the provisions of clauses (c) and (d), any shares held or power exercisable -
(i) by any person as a nominee for that other company (except where that other is concerned only in a fiduciary capacity); or
(ii) by, or by a nominee for, a subsidiary of that other company, not being a subsidiary which is concerned only in a fiduciary capacity;
shall be treated as held or exercisable by that other company;
(c) any shares held or power exercisable by any person by virtue of the provisions of any debentures of the first-mentioned company or of a trust deed for securing any issue of such debentures shall be disregarded;
(d) any shares held or power exercisable by, or by a nominee for, that other or its subsidiary [not being held or exercisable as mentioned in clause (c)] shall be treated as not held or exercisable by that other, if the ordinary business of that other or its subsidiary, as the case may be, includes the lending of money and the shares are held or the power is exercisable as aforesaid by way of security only for the purposes of a transaction entered into in the ordinary course of that business.
(4) For the purposes of this Act, a company shall be deemed to be the holding company of another if, but only if, that other is its subsidiary.
(5) In this section, the expression "company" includes any body corporate, and the expression "equity share capital" has the same meaning as in sub-section (2) of section 85.
(6) In the case of a body corporate which is incorporated in a country outside India, a subsidiary or holding company of the body corporate under the law of such country shall be deemed to be a subsidiary or holding company of the body corporate within the meaning and for the purposes of this Act also, whether the requirements of this section are fulfilled or not.
39[(7) A private company, being a subsidiary of a body corporate incorporated outside India, which, if incorporated in India, would be a public company within the meaning of this Act, shall be deemed for the purposes of this Act to be a subsidiary of a public company if the entire share capital in that private company is not held by that body corporate whether alone or together with one or more other bodies corporate incorporated outside India.]
(1) Each of the financial institutions specified in this sub-section shall be regarded, for the purposes of this Act, as a public financial institution, namely:-
(i) the Industrial Credit and Investment Corporation of India Limited, a company formed and registered under the Indian Companies Act, 1913;
(ii) the Industrial Finance Corporation of India, established under section 3 of the Industrial Finance Corporation Act, 1948;
(iii) the Industrial Development Bank of India, established under section 3 of the Industrial Development Bank of India Act, 1964;
(iv) the Life Insurance Corporation of India, established under section 3 of the Life Insurance Corporation Act, 1956;
(v) the Unit Trust of India, established under section 3 of the Unit Trust of India Act, 1963;
41[(vi) the Infrastructure Development Finance Company Limited, a company formed and registered under this Act.]
(2) Subject to the provisions of sub-section (1), the Central Government may, by notification in the Official Gazette, specify such other institution as it may think fit to be a public financial institution:
Provided that no institution shall be so specified unless-
(i) it has been established or constituted by or under any Central Act; or
(ii) not less than fifty-one per cent of the paid-up share capital of such institution is held or controlled by the Central Government.]
For the purpose of any provision in this Act which enacts that an officer of the company who is in default shall be liable to any punishment or penalty, whether by way of imprisonment, fine or otherwise, the expression "officer who is in default" means all the following officers of the company, namely:-
(a) the managing director or managing directors;
(b) the whole-time director or whole-time directors;
(c) the manager;
(d) the secretary;
(e) any person in accordance with whose directions or instructions the Board of directors of the company is accustomed to act;
(f) any person charged by the Board with the responsibility of complying with that provision:
Provided that the person so charged has given his consent in this behalf to the Board;
(g) where any company does not have any of the officers specified in clauses (a) to (c), any director or directors who may be specified by the Board in this behalf or where no director is so specified, all the directors:
Provided that where the Board exercises any power under clause (f) or clause (g), it shall, within thirty days of the exercise of such powers, file with the Registrar a return in the prescribed form.]
A person shall be deemed to be a relative of another, if, and only if, -
(a) they are members of a Hindu undivided family; or
(b) they are husband and wife; or
(c) the one is related to the other in the manner indicated in Schedule IA.]
Except where this Act expressly provides otherwise, a person shall not be deemed to be, within the meaning of any provision in this Act, a person in accordance with whose directions or instructions the Board of directors of a company is accustomed to act, by reason only that the Board acts on advice given by him in a professional capacity.
The Central Government may, by order, declare that in the case of any company, 44[***], any establishment carrying on either the same or substantially the same activity as that carried on by the head office of the company, or 45[any establishment engaged in any production, processing or manufacture], shall not be treated as a branch office of the company for all or any of the purposes of this Act.
Save as otherwise expressly provided in the Act-
(a) the provisions of this Act shall have effect notwithstanding anything to the contrary contained in the memorandum or articles of a company, or in any agreement executed by it, or in any resolution passed by the company in general meeting or by its Board of directors, whether the same be registered, executed or passed, as the case may be, before or after the commencement of this Act; and
(b) any provision contained in the memorandum, articles, agreement or resolution aforesaid shall, to the extent to which it is repugnant to the provisions of this Act, become or be void, as the case may be.
(1) The Court having jurisdiction under this Act shall be-
(a) the High Court having jurisdiction in relation to the place at which the registered office of the company concerned is situate, except to the extent to which jurisdiction has been conferred on any District Court or District Courts subordinate to that High Court in pursuance of sub-section (2); and
(b) where jurisdiction has been so conferred, the District Court in regard to matters falling within the scope of the jurisdiction conferred, in respect of companies having their registered offices in the district.
(2) The Central Government may, by notification in the Official Gazette and subject to such restrictions, limitations and conditions as it thinks fit, empower any District Court to exercise all or any of the jurisdiction conferred by this Act upon the Court, not being the jurisdiction conferred-
(a) in respect of companies generally, by sections 237, 391, 394, 395, and 397 to 407, both inclusive;
(b) in respect of companies with a paid-up share capital of not less than one lakh of rupees, by Part VII (sections 425 to 560) and the other provisions of this Act relating to the winding up of companies.
(3) For the purposes of jurisdiction to wind up companies, the expression "registered office" means the place which has longest been the registered office of the company during the six months immediately preceding the presentation of the petition for winding up.
Omitted by section 1 and Schedule, ibid with effect from 1st. July, 1967.]
Omitted by section 4 and Schedule, ibid with effect from 1st. July, 1967.]
Omitted by section 4 and Schedule, ibid, with effect from 1st. July, 1967.]
47[(1) As soon as may be after the commencement of the Companies (Amendment) Act, 1988, the Central Government shall, by notification in the Official Gazette, constitute a Board to be called the Board of Company Law Administration.
(1A) The Company Law Board shall exercise and discharge such powers and functions as may be conferred on it, by or under this Act or any other law, and shall also exercise and discharge such other powers and functions of the Central Government under this Act or any other law as may be conferred on it by the Central Government, by notification in the Official Gazette under the provisions of this Act or that other law.]
(2) The Company Law Board shall consist of such number of members, not exceeding 48[nine], as the Central Government deems fit, to be appointed by that Government by notification in the Official Gazette:
49[Provided that the Central Government may, by notification in the Official Gazette, continue the appointment of the chairman or any other member of the Company Law Board functioning as such immediately before the commencement of the Companies (Amendment) Act, 1988, as the chairman or any other member of the Company Law Board, after such commencement for such period not exceeding three years as may be specified in the notification.]
50[(2A) The members of the Company Law Board shall possess such qualifications and experience as may be prescribed.]
(3) One of the members shall be appointed by the Central Government to be the chairman of the Company Law Board.
(4) No act done by the Company Law Board shall be called in question on the ground only of any defect in the constitution of, or the existence of any vacancy in, the Company Law Board.
51[(4A) ***]
52[(4B) 53[The Board] may, by order in writing, form one or more Benches from among its members and authorise each such Bench to exercise and discharge such of the Board's powers and functions as may be specified in the order; and every order made or act done by a Bench in exercise of such powers or discharge of such functions shall be deemed to be the order or act, as the case may be, of the Board.
(4C) Every Bench referred to in sub-section (4B) shall have powers which are vested in a Court under the Code of Civil Procedure, 1908, while trying a suit, in respect of the following matters, namely:-
(a) discovery and inspection of documents or other material objects producible as evidence;
(b) enforcing the attendance of witnesses and requiring the deposit of their expenses;
(c) compelling the production of documents or other material objects producible as evidence and impounding the same;
(d) examining witnesses on oath;
(e) granting adjournments;
(f) reception of evidence on affidavits.
(4D) Every Bench shall be deemed to be a civil court for the purposes of section 195 and 54[Chapter XXVI of the Code of Criminal Procedure, 1973], and every proceeding before the Bench shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Indian Penal Code, 1860, and for the purpose of section 196 of that Code.]
55[(5) Without prejudice to the provisions of sub-sections (4C) and (4D), the Company Law Board shall in the exercise of its powers and the discharge of its functions under this Act, or any other law be guided by the principles of natural justice and shall act in its discretion.
(6) Subject to the foregoing provisions of this section, the Company Law Board shall have power to regulate its own procedure.]
Any person aggrieved by any decision or order of the Company Law Board may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Company Law Board to him on any question of law arising out of such order:
Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days].
Certain companies, associations and partnerships to be registered as companies under Act
(1) No company, association or partnership consisting of more than ten persons shall be formed for the purpose of carrying on the business of banking, unless it is registered as a company under this Act, or is formed in pursuance of some other Indian Law.
(2) No company, association or partnership consisting of more than twenty persons shall be formed for the purpose of carrying on any other business that has for its object the acquisition of gain by the company, association or partnership, or by the individual members thereof, unless it is registered as a company under this Act, or is formed in pursuance of some other Indian law.
(3) This section shall not apply to a joint family as such carrying on a business; and where a business is carried on by two or more " joint families, in computing the number of persons for the purposes of sub-sections (1) and (2), minor members of such families shall be excluded.
(4) Every member of a company, association or partnership carrying on business in contravention of this section shall be personally liable for all liabilities incurred in such business.
(5) Every person who is a member of a company, association or partnership formed in contravention of this section shall be punishable with fine which may extend to 56A[ten thousand rupees].
Memorandum of association
(1) Any seven or more persons, or where the company to be formed will be a private company, any two or more persons, associated for any lawful purpose may, by subscribing their names to a memorandum of association and otherwise complying with the requirements of this Act in respect of registration, form an incorporated company, with or without limited liability.
(2) Such a company may be either-
(a) a company having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them (in this Act termed "a company limited by shares");
(b) a company having the liability of its members limited by the memorandum to such amount as the members may respectively undertake by the memorandum to contribute to the assets of the company in the event of its being wound up (in this Act termed "a company limited by guarantee"); or
(c) a company not having any limit on the liability of its members (in this Act termed "an unlimited company").
(1) The memorandum of every company shall state -
(a) the name of the company with "Limited" as the last word of the name in the case of a public limited company, and with "Private Limited" as the last words of the name in the case of a private limited company;
(b) the State in which the registered office of the company is to be situate; 57[***]
58[(c) in the case of a company in existence immediately before the commencement of the Companies (Amendment) Act, 1965, the objects of the company;
(d) in the case of a company formed after such commencement,-
(i) the main objects of the company to be pursued by the company on its incorporation and objects incidental or ancillary to the attainment of the main objects;
(ii) other objects of the company not included in sub-clause (i); and
(e) in the case of companies (other than trading corporations), with objects not confined to one State, the States to whose territories the objects extend.]
(2) The memorandum of a company limited by shares or by guarantee shall also state that the liability of its members is limited.
(3) The memorandum of a company limited by guarantee shall also state that each member undertakes to contribute to the assets of the company in the event of its being wound up while he is a member or within one year after he ceases to be a member, for payment of the debts and liabilities of the company, or of such debts and liabilities of the company as may have been contracted before he ceases to be a member, as the case may be, and of the costs, charges and expenses of winding up, and for adjustment of the rights of the contributories among themselves, such amount as may be required, not exceeding a specified amount.
(4) In the case of a company having a share capital-
(a) unless the company is an unlimited company, the memorandum shall also state the amount of share capital with which the company is to be registered and the division thereof into shares of a fixed amount;
(b) no subscriber of the memorandum shall take less than one share; and
(c) each subscriber of the memorandum shall write opposite to his name the number of shares he takes.
The memorandum of association of a company shall be in such one of the Forms in Tables B, C, D and E in Schedule I as may be applicable to the case of the company, or in a Form as near thereto as circumstances admit.
The memorandum shall-
(a) be printed,
(b) be divided into paragraphs numbered consecutively, and
(c) be signed by each subscriber (who shall add his address, description and occupation, if any), in the presence of at least one witness who shall attest the signature and shall likewise add his address, description and occupation, if any.
Where, in the memorandum of association of a company in existence immediately before the commencement of the Madras State (Alteration of Name) Act, 1968, it is stated that Madras is the State in which the registered office of that company is situate, then, notwithstanding anything contained in this Act, the said memorandum shall, as from such commencement, be deemed to have been altered by substitution of a reference to the State of Tamil Nadu for the reference to the State of Madras, and the Registrar of the State of Tamil Nadu shall make necessary alterations in the memorandum of association and the certificate of incorporation of the said company.]
Where, in the memorandum of association of a company in existence immediately before the commencement of the Mysore State (Alteration of Name) Act, 1973, it is stated that Mysore is the State in which the registered office of that company is situate, then, notwithstanding anything contained in this Act, the said memorandum shall, as from such commencement, be deemed to have been altered by substitution of a reference to the State of Karnataka for the reference to the State of Mysore, and the Registrar of the State of Karnataka shall make necessary alterations in the memorandum of association and the certificate of incorporation of the said company.]
(1) A company shall not alter the conditions contained in its memorandum except in the cases, in the mode, and to the extent, for which express provision is made in this Act.
(2) Only those provisions which are required by section 13 or by any other specific provision contained in this Act, to be stated in the memorandum of the company concerned shall be deemed to be conditions contained in its memorandum.
(3) Other provisions contained in the memorandum, including those relating to the appointment of a managing director, 21[***] or manager, may be altered in the same manner as the articles of the company, but if there is any express provision in this Act permitting of the alteration of such provisions in any other manner, they may also be altered in such other manner.
(4) All references to the articles of a company in this Act shall be construed as including references to the other provisions aforesaid contained in its memorandum
(1) A company may, by special resolution, alter the provisions of its memorandum so as as to change the place of its registered office form one State to another, or with respect to the objects of the company so far as may be required to enable it-
(a) to carry on its business more economically or more efficiently;
(b) to attain its main purpose by new or improved means;
(c) to enlarge or change the local area of its operations;
(d) to carry on some business which under existing circumstances may conveniently or advantageously be combined with the business of the company;
(e) to restrict or abandon any of the objects specified in the memorandum;
(f) to sell or dispose of the whole, or any part, of the undertaking, or of any of the undertakings, of the company; or
(g) to amalgamate with any other company or body of persons.
62[(2) The alteration of the provisions of memorandum relating to the change of the place of its registered Office from one State to another shall not take effect unless it is confirmed by the Company Law Board on petition.]
(3) Before confirming the alteration, the 61[Company Law Board] must be satisfied-
(a) that sufficient notice has been given to every holder of the debentures of the company, and to every other person or class of persons whose interests will, in the opinion of the 25[Company Law Board], be affected by the alteration; and
(b) that, with respect to every creditor who, in the opinion of the 25[Company Law Board], is entitled to object to the alteration, and who signifies his objection in the manner directed by the 25[Company Law Board], either his consent to the alteration has been obtained or his debt or claim has been discharged or has determined, or has been secured to the satisfaction of the 25[Company Law Board]:
Provided that the 25[Company Law Board] may, in the case of any person or class of persons, for special reasons, dispense with the notice required by clause (a).
63[(4) The 61[Company Law Board ]shall cause notice of the petition for confirmation of the alteration to be served on the Registrar who shall also be given a reasonable opportunity to appear before the 61[Company Law Board] and state his objections and suggestions, if any, with respect to the confirmation of the alteration.]
(5) The 25[Company Law Board] may make an order confirming the alteration 64[***]on such terms and conditions, if any, as it thinks fit, and may make such order as to costs as it thinks proper.
(6) The 61[Company Law Board] shall, in exercising its powers under this section, have regard to the rights and interests of the members of the company and of every class of them, as well as to the rights and interests of the creditors of the company and of every class of them.
(7) The 25[Company Law Board] may, if it thinks fit, adjourn the proceedings in order that an arrangement may be made to the satisfaction of the 25[Company Law Board] for the purchase of the interests of dissentient members; and may give such directions and make such orders as it thinks fit for facilitating, or carrying into effect, any such arrangement:
Provided that no part of the capital of the company may be expended in any such purchase.
(1) No company shall change the place of its registered office from one place to another within a State unless such change is confirmed by the Regional Director.
(2) The company shall make an application in the prescribed form to the Regional Director for confirmation under sub-section (1).
(3) The confirmation referred to in sub-section (1), shall be communicated to the company within four weeks from the date of receipt of application for such change.
Explanation.—For the purposes of this section, it is hereby declared that the provisions of this section shall apply only to the companies which change the registered office from the jurisdiction of one Registrar of Companies to the jurisdiction of another Registrar of Companies within the same State.
(4) The company shall file, with the Registrar a certified copy of the confirmation by the Regional Director for change of its registered office under this section, within two months from the date of confirmation, together with a printed copy, of the memorandum as altered and the Registrar shall register the same and certify the registration under his hand within one month from the date of filing of such document.
(5) The certificate shall be conclusive evidence that all the requirements of this Act with respect to the alteration and confirmation have been complied with and henceforth the memorandum as altered shall be the memorandum of the company.]
65[(1) A company shall file with the Registrar-
(a) a special resolution passed by a company in relation to clauses (a) to (g) of sub-section (1) of section 17, within one month from the date of such resolution; or
(b) a certified copy of the order of the Company Law Board made under sub-section (5) of that section conforming the alteration, within three months from the date of order,
as the case may be, together with a printed copy of the memorandum as altered and the Registrar shall register the same and certify the registration under his hand within one month from the date of filing of such documents.]
(2) The certificate shall be conclusive evidence that all the requirements of this Act with respect or the alteration and the confirmation thereof have been complied with, and thenceforth the memorandum as so altered shall be the memorandum of the company.
(3) Where the alteration involves a transfer of the registered office from one State to another, a certified copy of the order confirming the alteration shall be filed by the company with the Registrar of each of the States, and the Registrar of each such State shall register the same, and shall certify under his hand the registration thereof; and the Registrar of the State all documents relating to the company registered, recorded or field in this office.
(4) The 61[Company Law Board] may, at any time, by order, extend the time for the filing of documents 66[or for the registration of the alteration] under this section by such period as it thinks proper.
(1) No such alteration as is referred to in section 17 shall have any effect until it has been duly registered in accordance with the provisions of section 18.
67[(2) If the documents required to be filed with the Registrar under section 18 are not filed within the time allowed under that section, such alteration and the order of the 61[Company Law Board] made under sub-section (5) of section 17 and all proceedings connected therewith, shall, at the expiry of such period, become void and inoperative:
Provided that the 25[Company Law Board] may, on sufficient cause shown, revive the order on application made within a further period of one month.]
Provisions with respect to names of companies
(1) No company shall be registered by a name which, in the opinion of the Central Government, is undesirable.
26B[(2) Without prejudice to the generality of the foregoing power, a name which is identical with, or too nearly resembles,-
(i) the name by which a company in existence has been previously registered, or
(ii) a registered trade mark, or a trade mark which is subject of an application for registration, of any other person under the Trade Marks Act, 1999,
may be deemed to be undesirable by the Central Government within the meaning of sub-section (1).
(3) The Central Government may, before deeming a name as undesirable under clause (ii) of sub-section (2), consult the Registrar of Trade Marks.]
A company may, by special resolution and with the approval of the Central Government signified in writing, change its name:
68[Provided that no such approval shall be required where the only change in the name of a company is the addition thereto or, as the case may be, the deletion therefrom, of the word "Private", consequent on the conversion in accordance with the provisions of this Act of a public company into a private company or of a private company into a public company.]
(1) 26B[If, through inadvertence or otherwise, a company on its first registration or on its registration by a new name, is registered by a name which,-
(i) in the opinion of the Central Government is identical with, or too nearly resembles, the name by which a company in existence has been previously registered, whether under this Act or any previous companies law, the first-mentioned company, or
(ii) on an application by a registered proprietor of a trade mark, is in the opinion of the Central Government identical with, or too nearly resembles, a registered trade mark of such proprietor under the Trade Marks Act, 1999, such company,-]
(a) may, by ordinary resolution and with the previous approval of the Central Government signified in writing, change its name or new name; and
(b) shall, if the Central Government so directs within twelve months of its first registration or registration by its new name, as the case may be, or within twelve months of the commencement of this Act, whichever is later, by ordinary resolution and with the previous approval of the Central Government signified in writing, change its name or new name within a period of three months from the date of the direction or such longer period as the Central Government may think fit to allow.
68B[Provided that no application under clause (ii) made by a registered proprietor of a trade mark after five years of coming to notice of registration of the company shall be considered by the Central Government.]
(2) If a company makes default in complying with any direction given under clause (b) of sub-section (1), the company, and every officer who is in default, shall be punishable with fine which may extend to 68A[one thousand rupees] for every day during which the default continues.
(1) Where a company changes its name in pursuance of section 21 or 22, the Registrar shall enter the new name on the register in the place of the former name, and shall issue a fresh certificate of incorporation with the necessary alterations embodied therein; and the change of name shall he complete and effective only on the issue of such a certificate.
(2) The Registrar shall also make the necessary alteration in the memorandum of association of the company.
(3) The change of name shall not effect any rights or obligations of the company, or render defective any legal proceedings by or against it; and any legal proceedings which might have been continued or commenced by or against the company by its former name may be continued by or against the company by its new name.
(1) In the case of a company which was a private limited company immediately before the commencement of this Act, the Registrar shall enter the word "Private" before the word "Limited" in the name of the company upon the register and shall also make the necessary alterations in the certificate of incorporation issued to the company and in its memorandum of association.
(2) Sub-section (3) of section 23 shall apply to a change of name under sub-section (1), as it applies to a change of name under section 21.
(1) Where it is proved to the satisfaction of the Central Government that an association:-
(a) is about to be formed as a limited company for promoting commerce, art, science, religion, charity or any other useful object, and
(b) intends to apply its profits, if any, or other income in promoting its objects, and to prohibit the payment of any dividend to its members,
the Central Government may, by licence, direct that the association may be registered as a company with limited liability, without the addition to its name of the word "Limited" or the words "Private Limited".
(2) The association may thereupon be registered accordingly; and on registration shall enjoy all the privileges, and (subject to the provisions of this section) be subject to all the obligations, of limited companies.
(3) Where it is proved to the satisfaction of the Central Government-
(a) that the objects of a company registered under this Act as a limited company are restricted to those specified in clause (a) of sub-section (1), and
(b) that by its constitution the company is required to apply its profits, if any, or other income in promoting its objects and is prohibited from paying any dividend to its members,
the Central Government may, by licence, authorise the company by a special resolution to change its name, including or consisting of the omission of the word "Limited" or the words "Private Limited"; and section 23 shall apply to a change of name under this sub-section as it applies to a change of name under section 21.
(4) A firm may be a member of any association or company licensed under this section, but on the dissolution of the firm, its membership of the association or company shall cease.
(5) A licence may be granted by the Central Government under this section on such conditions and subject to such regulations as it thinks fit, and those conditions and regulations, shall be binding on the body to which the licence is granted, and where the grant is under sub-section (1), shall, if the Central Government so directs, be inserted in the memorandum, or in the articles, or partly in the one and partly in the other.
69[(6) It shall not be necessary for a body to which a licence is so granted to use the word "Limited" or the words "Private Limited" as any part of its name and, unless its articles otherwise provide, such body shall, if the Central Government by general or special order so directs and to the extent specified in the directions, be exempt from such of the provisions of this Act as may be specified therein.]
(7) The licence may at any time be revoked by the Central Government, and upon revocation, the Registrar shall enter the word "Limited" or the words "Private Limited" at the end of the name upon the register of the body to which it was granted; and the body shall cease to enjoy the exemption granted by this section:
Provided that, before a licence is so revoked, the Central Government shall give notice in writing of its intention to the body, and shall afford it an opportunity of being heard in opposition to the revocation.
70[(8)(a) A body in respect of which a licence under this section is in force shall not alter the provisions of its memorandum with respect to its objects except with the previous approval of the Central Government signified in writing.
(b) The Central Government may revoke the licence of such a body if it contravenes the provisions of clause (a).
(c) In according the approval referred to in clause (a), the Central Government may vary the licence by making it subject to such conditions and regulations as that Government thinks fit, in lieu of, or in addition to, the conditions and regulations, if any, to which the licence was formerly subject.
(d) Where the alteration proposed in the provisions of the memorandum of a body under this sub-section is with respect to the objects of the body so far as may be required to enable it to do any of the things specified in clauses (a) to (g) of sub-section (1) of section 17, the provisions of this sub-section shall be in addition to, and not in derogation of, the provisions of that section.]
(9) Upon the revocation of a licence granted under this section to a body the name of which contains the words "Chamber of Commerce", that body shall, within a period of three months from the date of revocation or such longer period as the Central Government may think fit to allow, change its name to a name which does not contain those words; and-
(a) the notice to be given under the proviso to sub-section (7) to that body shall include a statement of the effect of the foregoing provisions of this sub-section; and
(b) section 23 shall apply to a change of name under this sub-section as it applies to a change of name under section 21.
(10) If the body makes default in complying with the requirements of sub-section (9), it shall be punishable with fine which may extend to 70A[five thousands rupees] for every day during which the default continues.
Articles of Association
There may in the case of a public company, limited by shares, and there shall in the case of an unlimited company or a company limited by guarantee or a private company limited by shares, be registered with the memorandum, articles of association signed by the subscribers of the memorandum, prescribing regulations for the company.
(1) In the case of an unlimited company, the articles shall state the number of members with which the company is to be registered and, if the company has a share capital, the amount of share capital with which the company is to be registered.
(2) In the case of a company limited by guarantee, the articles shall state the number of members with which the company is to be registered.
(3) In the case of a private company having a share capital, the articles shall contain provisions relating to the matters specified in sub-clauses (a), (b) and (c) of clause (iii) of sub-section (1) of section 3; and in the case of any other private company, the articles shall contain provisions relating to the matters specified in the said sub-clauses (b) and (c).
(1) The articles of association of a company limited by shares may adopt all or any of the regulations contained in Table A in Schedule I.
(2) In the case of any such company which is registered after the commencement of this Act, if articles are not registered, or if articles are registered, in so far as the articles do not exclude or modify the regulations contained in Table A aforesaid, those regulations shall, so far as applicable, be the regulations of the company in the same manner and to the same extent as if they were contained in duly registered articles.
The articles of association of any company, not being a company limited by shares, shall be in such one of the Forms in Tables C, D and E in Schedule I as may be applicable, or in a Form as near thereto as circumstances admit:
71[Provided that nothing in this section shall be deemed to prevent a company from including any additional matters in its articles in so far as they are not inconsistent with the provisions contained in the Form in any of the Tables C, D and E, adopted by the company.]
Articles shall-
(a) be printed;
(b) be divided into paragraphs numbered consecutively; and
(c) be signed by each subscriber of the memorandum of association (who shall add his address, description and occupation, if any), in the presence of at least one witness who shall attest the signature and shall likewise add his address, description and occupation, if any.
(1) Subject to the provisions of this Act and to the conditions contained in its memorandum, a company may, by special resolution, alter its articles:
72[Provided that no alteration made in the articles under this sub-section which has the effect of converting a public company into a private company, shall have effect unless such alteration has been approved by the Central Government.]
(2) Any alteration so made shall, subject to the provisions of this Act, be as valid as if originally contained in the articles and be subject in like manner to alteration by special resolution.
73[(2A) Where any alteration such as is referred to in the proviso to sub-section (1) has been approved by the Central Government, a printed copy of the articles as altered shall be filed by the company with the Registrar within one month of the date of receipt of the order of approval.]
(3) The power of altering articles under this section shall, in the case of any company formed and registered under Act No. 19 of 1857 and Act No. 7 of 1860 or either of them, extend to altering any provisions in Table B annexed to Act 19 of 1857, and shall also, in the case of an unlimited company formed and registered under the said Acts or either of them, extend to altering any regulations relating to the amount of capital or its distribution into shares, notwithstanding that those regulations are contained in the memorandum.
Change of Registration of Companies
(1) Subject to the provisions of this section,-
(a) a company registered as unlimited may register under this Act as a limited company; and
(b) a company already registered as a limited company may re-register under this Act.
(2) On registration in pursuance of this section, the Registrar shall close the former registration of the company, and may dispense with the delivery to him of copies of any documents with copies of which he was furnished on the occasion of the original registration of the company ; but, save as aforesaid, the registration shall take place in the same manner and shall have effect, as if it were the first registration of the company under this Act.
(3) The registration of an unlimited company as a limited company under this section shall not affect any debts, liabilities, obligations or contracts incurred or entered into, by, to, with or on behalf of, the company before the registration, and those debts, liabilities, obligations and contracts may be enforced in the manner provided for Part IX of this Act in the case of a company registered in pursuance of that part.
General provisions with respect to memorandum and articles
(1) There shall be presented for registration, to the Registrar of the State in which the registered office of the company is stated by the memorandum to be situate-
(a) the memorandum of the company;
(b) its articles, if any; and
74[(c) the agreement, if any, which the company proposes-to enter into with any individual for appointment as its managing or whole-time director or manager.]
(2) A declaration by an advocate of the Supreme Court or of a High Court, an attorney or a pleader entitled to appear before a High Court, or 75[a secretary, or a chartered accountant, in whole-time practice in India], who is engaged in the formation of a company, or by a person named in the articles as a director, 76[***] manager or secretary of the company, that all the requirements of this Act and the rules thereunder have been complied within respect of registration and matters precedent and incidental thereto, shall be filed with the Registrar; and the Registrar may accept such a declaration as sufficient evidence of such compliance.
77[Explanation- For the purposes of this sub-section, "chartered accountant in whole-time practice in India" means a chartered accountant within the meaning of clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949, who is practising in India and who is not in full-time employment.]
(3) If the Registrar is satisfied that all the requirements aforesaid have been complied with by the company and that it is authorised to be registered under this Act, he shall retain and register the memorandum, the articles, if any, and the agreement referred to in clause (c) of sub-section (1), if any.
(1) On the registration of the memorandum of company, the Registrar shall certify under his hand that the company is incorporated and, in the case of a limited company, that the company is limited.
(2) From the date of incorporation mentioned in the certificate of incorporation, such of the subscribers of the memorandum and other persons, as may from time to time be members of the company, shall be a body corporate by the name contained in the memorandum capable forthwith of exercising all the functions of an incorporated company, and having perpetual succession and a common seal, but with such liability on the part of the members to contribute to the assets of the company in the event of its being wound up as is mentioned in this Act.
A certificate of incorporation given by the Registrar in respect of any association shall be conclusive evidence that all the requirements of this Act have been complied within respect of registration and matters precedent and incidental thereto, and that the association is a company authorised to be registered and duly registered under this Act.
(1) Subject to the provisions of this Act, the memorandum and articles shall, when registered, bind the company and the members thereof to the same extent as if they respectively had been signed by the company and by each member, and contained covenants on its and his part to observe all the provisions of the memorandum and of the articles.
(2) All money payable by any member to the company under the memorandum or articles shall be a debt due from him to the company.
(1) In the case of a company limited by guarantee and not having a share capital, and registered on or after the first day of April, 1914, every provision in the memorandum or articles or in any resolution of the company purporting to give any person a right to participate in the divisible profits of the company otherwise than as a member shall be void.
(2) For the purpose of the provisions of this Act relating to the memorandum of a company limited by guarantee and of this section, every provision in the memorandum or articles, or in any resolution, of any company limited by guarantee and registered on or after the first day of April, 1914, purporting to divide the undertaking of the company into shares or interests, shall be treated as a provision for a share capital, notwithstanding that the nominal amount or number of the shares or interests is not specified thereby.
Notwithstanding anything in the memorandum or articles of a company, no member of the company shall be bound by an alteration made in the memorandum or articles after the date on which he became a member, if and so far as the alteration requires him to take or subscribe for more shares than the number held by him at the date on which the alteration is made, or in any way increases his liability as at that date, to contribute to the share capital of, or otherwise to pay money to, the company:
78[Provided that this section shall not apply –
(a) in any case where the member agrees in writing either before or after a particular alteration is made, to be bound by the alteration; or
(b) in any case where the company is a club or the company is any other association and the alteration requires the member to pay recurring or periodical subscriptions or charges at a higher rate although he does not agree in writing to be bound by the alteration.]
(1) A company shall, on being so required by a member, send to him within seven days of the requirement and subject to the payment of a fee of one rupee, a copy each of the following documents as in force for the time being –
(a) the memorandum;
(b) the articles, if any;
79[***]; and
(d) every other agreement and every resolution referred to in section 192, if and in so far as they have not been embodied in the memorandum or articles.
(2) If a company makes default in complying with the requirements of this section, the company, and every officer of the company who is in default, shall be punishable, for each offence, with fine which may extend to 79A[five hundred rupees].
(1) Where an alteration is made in the memorandum or articles of a company, 79B[***], or any resolution referred to in section 192, every copy of the memorandum, articles, agreement or resolution issued after the date of the alteration shall be in accordance with the alteration.
(2) If, at any time, the company issues any copies of the memorandum, articles resolution or agreement, which are not in accordance with the alteration or alterations made therein before that time, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to 79C[one hundred rupees] for each copy so issued.
Membership of company
(1) The subscribers of the memorandum of a company shall be deemed to have agreed to become members of a company, and on its registration, shall be entered as members in its register of members.
(2) Every other person who 80[agrees in writing ] to become a member of a company and whose name is entered in its register of members, shall be a member of the company.
30[(3) Every person holding equity share capital of a company and whose name is entered as beneficial owner in the records of the depository shall be deemed to be a member of the concerned company.]
(1) Except in the case, mentioned in this section, a body corporate cannot be a member of a company which is its holding company and any allotment or transfer of shares in a company to its subsidiary shall be void.
(2) Nothing in this section shall apply-
(a) where the subsidiary is concerned as the legal representative of a deceased member of the holding company; or
(b) where the subsidiary is concerned as trustee, unless the holding company or a subsidiary thereof is beneficially interested under the trust and is not so interested only by way of security for the purposes of a transaction entered into by it in the ordinary course of a business which includes the lending of money.
(3) This section shall not prevent a subsidiary from continuing to be a member of its holding company if it was a member thereof either at the commencement of this Act or before becoming a subsidiary of the holding company, but except in the cases referred to in sub-section (2), the subsidiary shall have no right to vote at meetings of the holding company or of any class of members thereof.
(4) Subject to sub-section (2), sub-sections (1) and (3) shall apply in relation to a nominee for a body corporate which is a subsidiary, as if references in the said sub-sections (1) and (3) to such a body corporate included references to a nominee for it.
(5) In relation to a holding company which is either a company limited by guarantee or an unlimited company, the reference in this section to shares shall, whether or not the company has a share capital, be construed as including a reference to the interest of its members as such, whatever the form of that interest
Private companies
Where the articles of a company include the provision which, under clause (iii) of sub-section (1) of section 3, are required to be included in the articles of a company in order to constitute it a private company, but default is made in complying with any of those provisions, the company shall cease to be entitled to the privileges and exemptions conferred on private companies by or under this Act, and this Act shall apply to the company as if it were not a private company:
Provided that the 81[Company Law Board], on being satisfied that the failure to comply with the conditions was accidental or due to inadvertence or to some other sufficient cause, or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any other person interested and on such terms and conditions as seem to the 81[Company Law Board] just and expedient, order that the company be relieved from such consequences as aforesaid.
(1) Save as otherwise provided in this section, where not less than twenty-five per cent of the paid-up share capital of a private company having a share capital, is held by one or more bodies corporate, the private company shall,-
(a) on and from the date on which the aforesaid percentage is first held by such body or bodies corporate, or
(b) where the aforesaid percentage has been first so held before the commencement of the Companies (Amendment) Act, 1960 on and from the expiry of the period of three months from the date of such commencement unless within that period the aforesaid percentage is reduced below twenty-five per cent of the paid-up share capital of the private company,
become by virtue of this section a public company:
Provided that even after the private company has so become a public company, its articles of association may include provisions relating to the matters specified in clause (iii) of sub-section (1) of section 3 and the number of its members may be, or may at any time be reduced, below seven:
Provided further that computing the aforesaid percentage, account shall not be taken of any share in the private company held by a banking company if, but only if, the following conditions are satisfied in respect of such share, namely:-
(a) that the share-
(i) forms part of the subject-matter of a trust,
(ii) has not been set apart for the benefit of any body corporate, and
(iii) is held by the banking company either as a trustee of that trust or in its own name on behalf of a "trustee of that trust; or
(b) that the share-
(i) forms part of the estate of a deceased person,
(ii) has not been bequeathed by the deceased person by his will to any body corporate, and
(iii) is held by the banking company either as an executor or administrator of the deceased person or in its own name on behalf of an executor or administrator of the deceased person;
and the Registrar may, for the purpose of satisfying himself that any share is held in the private company by a banking company as aforesaid, call for at any time from the banking company such books and papers as he considers necessary;
83[Explanation- For the purposes of this sub-section, "bodies corporate" means public companies, or private companies which had become-public companies by virtue of this section.]
84[(1A) Without prejudice to the provisions of sub-section (1), where the average annual turnover of a private company, whether in existence at the commencement of the Companies (Amendment) Act, 1974, or incorporated thereafter, is not, during the relevant period, 85[less than such amount as may be prescribed], the private company shall, irrespective of its paid-up share capital, become, on and from the expiry of a period of three months from the last day of the relevant period during which the private company had the said average annual turnover, a public company by virtue of this sub-section:
Provided that even after the private company has so become a public company, its articles of association may include provisions relating to the matters specified in clause (iii) of sub-section (1) of section 3 and the number of its members may be, or may at any time be reduced, below seven.
(1B) Where not less than twenty-five per cent of the paid-up share capital of a public company, having share capital, is held by a private company, the private company shall,-
(a) on and from the date on which the aforesaid percentage is first held by it after the commencement of the Companies (Amendment) Act, 1974, or
(b) where the aforesaid percentage has been first so held before the commencement of the Companies (Amendment) Act, 1974, on and from the expiry of the period of three months from the date of such commencement, unless within that period the aforesaid percentage is reduced below twenty-five per cent of the paid-up share capital of the public company,
become, by virtue of this sub-section, a public company and thereupon all other provision of this section shall apply thereto:
Provided that even after the private company has so become a public company, its articles of association may include provisions relating to the matters specified in clause (iii) of sub-section (1) of section 3 and the number of its members may be, or may at any time be reduced, below seven.]
83[(1C) Where, after the commencement of the Companies (Amendment ) Act, 1988, a private company accepts, after an invitation is made by an advertisement, or renews deposits from the public, other than its members, directors or their relatives, such private company shall, on and from the date on which such acceptance or renewal, as the case may be, is first made after such commencement become a public company and thereupon all the provisions of this section shall apply thereto:
Provided that even after the private company has so become a public company, its articles of association may include provisions relating to the matters specified in clause (iii) of sub-section (1) of section 3 and the number of its members may be or may at any time, be reduced below seven.]
(2) Within three months from the date on which a private company becomes a public company by virtue of this section, the company shall inform the Registrar that it has become a public company as aforesaid, and thereupon the Registrar shall delete the word "Private" before the word "Limited" in the name of the company upon the register and shall also make the necessary alterations in the certificate of incorporation issued to the company and in its memorandum of association.
85A[(2A) Where a public company referred to in sub-section (2) becomes a private company on or after the commencement of the Companies (Amendment) Act, 2000, such company shall inform the Registrar that it has become a private company and thereupon the Registrar shall substitute the word 'private company' for the word 'public company' in the name of the company upon the register and shall also make the necessary alterations in the certificate of incorporation issued to the company and in its memorandum of association within four weeks from the date of application made by the company.]
(3) Sub-section (3) of section 23 shall apply to a change of name under sub-section (2) as it applies to a change of name under section 21.
(4) A private company which has become a public company by virtue of this section shall continue to be a public company until it has, with the approval of the Central Government and in accordance with the provisions of this Act, again become a private company.
(5) If a company makes default in complying with sub-section (2), the company and every officer of the company who is in default, shall be punishable with fine which may extend to five hundred rupees for every day during which the default continues.
86[(6) [***]
(7) [***]]
(8) Every private company having a share capital shall, in addition to the certificate referred to in sub-section (2) of section 161, file with the Registrar along with the annual return a second certificate signed by both the signatories of the return, stating either-
(a) that since the date of the annual general meeting with reference to which the last return was submitted, or in the case of a first return, since the date of the incorporation of the private company, no body or bodies corporate has or have held twenty-five per cent or more of its paid-up share capital, 87[***]
88[(b) ***],
84[(c) that the private company, irrespective of its paid-up share capital, did not have, during the relevant period, an average annual turnover of 89[such amount as is referred to in sub-section (1A) or more],
50[(d) that the private company did not accept or renew deposits from the public.]
84[(9) Every private company, having share capital, shall file with the Registrar along with the annual return a certificate signed by both the signatories of the return, stating that since the date of the annual general meeting with reference to which the last return was submitted, or in the case of a first return, since the date of the incorporation of the private company, it did not hold twenty-five per cent or more of the paid-up share capital of one or more public companies.
83[(10) Subject to the other provisions of this Act, any reference in this section to accepting, after an invitation is made by an advertisement, or renewing deposits from the public shall be construed as including a reference to accepting, after an invitation is made by an advertisement, or renewing deposits from any section of the public, and the provisions of section 67 shall, so far as may be, apply, as if the reference to invitation to the public to subscribe for shares or debentures occurring in that section, includes a reference to invitation from the public for acceptance of deposits.]
83A[(11) Nothing contained in this section, except sub-section (2A), shall apply on and after the commencement of the Companies (Amendment) Act, 2000.]
Explanation- For the purposes of this section,-
(a) "relevant period" means the period of three consecutive financial years,-
(i) immediately preceding the commencement of the Companies (Amendment) Act, 1974, or
(ii) a part of which immediately preceded such commencement and the other part of which immediately, followed such commencement, or
(iii) immediately following such commencement or at any time thereafter;
(b) "turnover", of a company, means the aggregate value of the realisation made from the sale, supply or distribution of goods or on account of services rendered, or both, by the company during a financial year;]
83[(c) "deposit" has the same meaning as in section 58A.]
(1) If a company, being a private company, alters its articles in such a manner that they no longer include the provisions which, under clause (iii) of sub-section (1) of section 3, are required to be included in the articles of a company in order to constitute it a private company, the company,-
(a) shall, as on the date of the alteration, cease to be a private company; and
(b) shall, within a period of 90[thirty] days after the said date, file with the Registrar either a prospectus or a statement in lieu of prospectus, as specified in sub-section (2).
(2)(a) Every prospectus filed under sub-section (1) shall state the matters specified in Part I of Schedule II and set out the reports specified in Part II of that Schedule, and the said Parts I and II shall have effect subject to the provisions contained in Part III of that Schedule.
(b) Every statement in lieu of prospectus filed under sub-section (1) shall be in the form and contain the particulars set out in Part I of Schedule IV, and in the cases mentioned in Part II of that Schedule, shall set out the reports specified therein, and the said Parts I and II shall have effect subject to the provisions contained in Part III of that Schedule.
(c) Where the persons making any such report as is referred to in clause (a) or (b) have made therein, or have, without giving the reasons indicated therein, any such adjustments as are mentioned in clause 32 of Schedule II or clause 5 of Schedule IV, as the case may be, the prospectus or statement in lieu of prospectus filed as aforesaid, shall have endorsed thereon or attached thereto, a written statement signed by those persons, setting out the adjustments and giving the reasons therefor.
(3) If default is made in complying with sub-section (1) or (2), the company, and every officer of the company who is in default, shall be punishable with fine which may extend to 91A[five thousand rupees] for every day during which the default continues.
(4) Where any prospectus or statement in lieu of prospectus filed under this section includes any untrue statement, any person who authorised the filing of such prospectus or statement shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to 91B[fifty thousand rupees], or with both, unless he proves either that the statement was immaterial or that he had reasonable ground to believe, and did up to the time of the filing of the prospectus or statement believe, that the statement was true.
(5) For the purposes of this section-
(a) a statement included in a prospectus or a statement in lieu of prospectus shall be deemed to be untrue if it is misleading in the form and context in which it is included; and
(b) where the omission from a prospectus or a statement in lieu of prospectus of any matter is calculated to mislead, the prospectus or statement in lieu of prospectus shall be deemed, in respect of such omission, to be a prospectus or a statement in lieu of prospectus in which an untrue statement is included.
(6) For the purposes of sub-section (4) and clause (a) of sub-section (5), the expression "included" when used with reference to a prospectus, or statement in lieu of prospectus, means included in the prospectus or statement in lieu of prospectus itself or contained in any report or memorandum appearing on the face thereof, or by reference incorporated therein.
Reduction of number of members below legal minimum
If at any time the number of members of a company, is reduced, in the case of public company, below seven, or in the case of a private company, below two, and the company carries on business for more than six months while the number is so reduced, every person who is a member of the company during the time that it so carries on business after those six months and is cognizant of the fact that it is carrying on business with fewer than seven members or two members, as the case may be, shall be severally liable for the payment of the whole debts of the company contracted during that time, and may be severally sued therefor.
Contracts and deeds, investments, seal, etc.
(1) Contracts on behalf of a company may be made as follows:-
(a) a contract which, if made between private persons, would by law be required to be in writing signed by the parties to be charged therewith, may be made on behalf of the company in writing signed by any person acting under its authority, express or implied, and may in the same manner be varied or discharged;
(b) a contract which, if made between private persons, would by law be valid although made by parol only and not reduced into writing, may be made by parol on behalf of the company by any person acting under its authority, express or implied, and may in the same manner be varied or discharged.
(2) A contract made according to this section shall bind the company.
A bill of exchange, hundi or promissory note shall be deemed to have been made, accepted, drawn or endorse on behalf of a company if drawn, accepted, made, or endorsed in the name of, or on behalf or on account of, the company by any person acting under its authority, express or implied.
(1) A company may, by writing under its common seal, empower any person, either generally or in respect of any specified matters, as its attorney, to execute deeds on its behalf in any place either in or outside India.
(2) A deed signed by such an attorney on behalf of the company and under his seal where sealing is required, shall bind the company and have the same effect as if it were under its common seal.
(1) Save as otherwise provided in sub-sections (2) to (5) 91[or any other law for the time being in force] and subject to the provisions of sub-sections (6) to (8),-
(a) all investments made by a company on its own behalf shall he made and held by it in its own name; and
(b) where any such investments are not so held at the commencement of this Act the company shall, within a period of one year from such commencement, either cause them to be transferred to, and hold them in, its own name, or dispose of them.
(2) Where the company has a right to appoint any person or persons,- or where any nominee or nominees of the company has or have been appointed, as a director or directors of any other body corporate, shares in such other body corporate to an amount not exceeding the nominal value of the qualification shares which are required to be held by a director thereof, may be registered or held by such company jointly in the names of itself and of each such person or nominee or in the name of each such person or nominee 92[***].
(3) A company may hold any shares in its subsidiary in the name or names of any nominee or nominees of the company, if and in so far as it is necessary so to do, to ensure that the number of members of the subsidiary is not reduced, where it is a public company, below seven, and where it is a private company, below two.
(4) Sub-section (1) shall not apply to investments made by a company whose principal business consists of the buying and selling of shares or securities.
(5) Nothing in this section shall be deemed to prevent a company-
(a) from depositing with a bank, being the bankers of the company, any shares or securities for the collection of any dividend or interest payable thereon; or
91[(aa) from depositing with, or transferring to, or holding in the name of, State Bank of India or a Scheduled Bank, being the bankers of the company, shares or securities, in order to facilitate the transfer thereof:
Provided that if within a period of six months from the date on which the shares or securities are transferred by the company to, or are first held by the company in the name of, the State Bank of India or a Scheduled Bank as aforesaid, no transfer of such shares or securities takes place, the company shall, as soon as practicable after the expiry of that period, have the shares or securities retransferred to it from the State Bank of India or the Scheduled Bank or, as the case may be, again hold the shares or securities in its own name; or]
(b) from
depositing with, or transferring to, any person any shares or securities, by way
of security for the repayment of any loan advanced to the company or the
performance of any obligation undertaken by
it;
30[(c) from holding investments in the name of a depository when such investment are in the form of securities held by the company as a beneficial owner.]
(6) The certificate or letter of allotment relating to the shares or securities in which investments have been made by a company shall, except in the cases referred to in sub-sections (4) and (5), be in the custody of such company or 93[with the State Bank of India or a Scheduled Bank], being the bankers of the company.
(7) Where, in pursuance of sub-section (2), (3), (4) or (5), and shares or securities in which investments have been made, by a company are not held by it in its own name, the company shall forthwith enter in a register maintained by it for the purpose –
(a) the nature, value, and such other particular as may be necessary fully to identify the shares or securities in question; and
(b) the bank or person in whose name or custody the shares or securities are held.
(8) The register kept under sub-section (7) shall be open to the inspection of any member or debenture holder of the company without charge, during business hours, subject to such reasonable restrictions as the company may, by its articles or in general meeting, impose, so that not less than two hours in each day are allowed for inspection.
(9) If default is made in complying with any of the requirements of sub-sections (1) to (8), the company, and every officer of the company who is in default, shall be punishable with fine which may extend to 91B[fifty thousand rupees].
(10) If any inspection required under sub-section (8) is refused, the 94[Company Law Board] may, by order, direct an immediate inspection of the register.
Nothing in this sub-section shall be construed as prejudicing in any way the operation of sub-section (9).
(11) In this section, "securities" include stock and debentures.
(1) A company whose objects require or comprise the transaction of business outside India may, if authorised by its articles, have for use in any territory, district or place not situate in India an official seal which shall be a facsimile of the common seal of the company, with the addition on its face of the name of the territory, district or place where it is to be used.
(2) A company having an official seal for use in any such territory, district or place may, by writing under its common seal, authorise any person appointed for the purpose in that territory, district or place to affix the official seal to any deed or other document to which the company is a party in that territory, district or place.
(3) The authority of any agent authorised under sub-section (2) shall, as between the company and any person dealing with the agent, continue during the period, if any, mentioned in the instrument conferring the authority, or if no period is there mentioned, until notice of the revocation or determination of the agent's authority has been given to the person dealing with him.
(4) The person affixing any such official seal shall, by writing under his hand, certify on the deed or other document to which the seal is affixed, the date on which and the place at which, it is affixed.
(5) A deed or other document to which an official seal is duly affixed shall bind the company as if it had been sealed with the common seal of the company.
Service of documents
A document may be served on a company or an officer thereof by sending it to the company or officer at the registered post, or by leaving it at its registered office:
30[Provided that where the securities are held in a depository, the records of the beneficial ownership may be served by such depository on the company by means of electronic mode or by delivery of floppies or discs.]
A document may be served on a Registrar by sending it to him at his office by post under a certificate of posting or by registered post, or by delivering it to, or leaving it for, him at his office.
(1) A document may be served by a company on any member thereof either personally, or by sending it by post to him to his registered address, or if he has no registered address in India, to the address, if any, within India supplied by him to the company for the giving of notices to him.
(2) Where a document is sent by post,-
(a) service thereof shall be deemed to be effected by properly addressing, prepaying and posting a letter containing the document, provided that where a member has intimated to the company in advance that documents should be sent to him under a certificate of posting or by registered post with or without acknowledgement due and has deposited with the company a sum sufficient to defray the expenses of doing so, service of the document shall not be deemed to be effected unless it is sent in the manner intimated by the member; and
(b) 95[***] such service shall be deemed to have been effected-
(i) in the case of a notice of a meeting, at the expiration of forty-eight hours after the letter containing the same is posted, and
(ii) in any other case at the time at which the letter would be delivered in the ordinary course of post.
(3) A document advertised in a newspaper circulating in the neighbourhood of the registered office of the company shall be deemed to be duly served on the day on which the advertisement appears, on every member of the company who has no registered address in India and has not supplied to the company an address within India for the giving of notices to him.
(4) A document may be served by the company on the joint-holders of a share by serving it on the joint-holder named first in the register in respect of the share.
(5) A document may be served by the company on the persons entitled to a share in consequence of the death or insolvency of a member by sending it through the post in a prepaid letter addressed to them by name, or by the title of representatives of the deceased, or assignees of the insolvent, or by any like description, at the address, if any, in India supplied for the purpose by the persons claiming to be so entitled, or until such an address has been so supplied, by serving the document in any manner in which it might have been served if the death or insolvency had not occurred.
Save as otherwise expressly provided in this Act, a document or proceeding requiring authentication by a company may be signed by a director, 21[***] the manager, the secretary or other authorised officer of the company, and need not be under its common seal.
1 Appointed day is 1st April, 1956, vide Notification No. S.R.O. 612, dated 8th. March, 1956 published in GOI, Ext., 1956, Pt. II, s. 3, page 473.
2 Substituted by Act No. 62 of 1956 for sub-section (3), w.e.f. 1st. November, 1956.
3 Omitted by Act No. 25 of 1968, w.e.f. 15th. August, 1968.
4 Inserted by Act No. 31 of 1965, w.e.f. 15th. October, 1965.
5 The word "further" omitted by Act No. 25 of 1968, w.e.f. 15th. August, 1968.
6 Clause (1) renumbered as clause (1A) and clause (1A) inserted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
7 Clauses (3) and (4) omitted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
8 Clauses (12A) and (12B) inserted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
8A. Clause (14A) inserted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
8B. Clause (15A) inserted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
8C. Clauses (19A) and (19B) inserted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
9 See now the Banking Regulation Act, 1949 (10 of 1949).
10 Substituted by Act No. 65 of 1960, for the words "does not include a corporation sole."
11 Inserted by Act No. 31 of 1965, w.e.f. 15th. October, 1965.
12 Clause (9) substituted by Act No. 65 of 1960.
13 Inserted by Act No. 53 of 1963, w.e.f. 1st. January, 1964.
14 Clause (11) substituted by Act No. 65 of 1960.
15 Omitted by MRTP (Amendment) Act, 1984, w.e.f. 1st. August, 1984.
16 Omitted by Act No. 62 of 1956, w.e.f. 1st. November, 1956.
16A Clause (23A) inserted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
17 Inserted by Act No. 41 of 1974, w.e.f. 1st. February, 1975.
18 Substituted by Act No. 65 of 1960, for the words "any powers of management".
19 Inserted by Act No. 41 of 1974, w.e.f. 1st, February, 1975.
20 Clause (25) omitted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
21 The words "managing agent, secretaries and treasurers" omitted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
22 Clause (30) substituted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
23 Clause (31A) inserted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
24 Substituted by Act No. 65 of 1960, for the words, brackets and figures "sub-section (1) of section 549 and sub-section (3) of section 550".
25 Substituted by Act No. 65 of 1960, for the words, brackets and figures "sub-section (1) of section 549 and sub-section (3) of section 550".
26 Substituted by Act No. 65 of 1960, for the words "any prospectus".
26A Clause (44) omitted by the Companies (Amendment) Act, 1988, w.e.f. 1st. December, 1988.
26B. Substituted by the Trade Marks Act, 1999.
27 Substituted for clause (45) by the Companies (Amendment) Act, 1988, w.e.f. 1st. December, 1988.
28 See Companies (Appointment and Qualifications of Secretary) Rules, 1988.
29 Inserted by the Companies (Amendment) Act, 1988, w.e.f. 15th. June, 1988.
29A Clause (45AA) inserted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
30 Inserted by the Depositories Act, 1996, w.e.f. 20th. September, 1995.
30A Clause (46A) inserted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
31 Clause (49A) omitted by Act No. 17 of 1967, w.e.f. 1st. July, 1967.
32 Substituted by Act No. 62 of 1956, for clause (f), w.e.f. 1st. November, 1956.
33 Inserted by Act No. 25 of 1968, w.e.f. 15th. August, 1968.
34 Inserted by the Goa, Daman and Diu (Laws) No. 2 Regulation, 1963.
35 The words, brackets and figures "(Carta Lei of the 11th April, 1901)" omitted by the Repealing and Amending Act, 1964.
35A Substituted for the words "means a company which, by its articles" by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
35B Sub-clause (d) inserted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
35C Substituted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
36 Clause (b) omitted by Act No. 62 of 1956, w.e.f. 1st. November, 1956.
36A Inserted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
37 Earlier clause (b) substituted by Act No. 65 of 1960.
38 Earlier clause (c) substituted by Act No. 65 of 1960 for clause.
39 Inserted by Act No. 65 of 1960.
40 Inserted by Act No. 41 of 1974, w.e.f. 1st. February, 1975.
41 Inserted by the Companies (Amendment) Act, 1999, w.e.f. 31st. October, 1998.
42 Earlier section 5 substituted by the Companies (Amendment) Act, 1988, w.e.f. 15th. July, 1988
43 Substituted by Act No. 65 of 1960.
44 The words "not being a banking or an insurance company" omitted by section 5, ibid.
45 Substituted for the words "any production or manufacture" by section 5, ibid.
46 Inserted by Act No. 53 of 1963, w.e.f. 1st. January, 1964.
47 Sub-section (1) substituted by the Companies (Amendment) Act, 1988, w.e.f. 31st. May, 1991.
48 Substituted by Act No. 41 of 1974, for the word "five", w.e.f. 1st. February, 1975.
49 Inserted by the Companies (Amendment) Act, 1988, w.e.f. 31st. May, 1991.
50 Inserted, ibid, w.e.f. 4th. August, 1989.
51 Omitted by the Companies (Amendment) Act, 1988, w.e.f. 31st. May, 1991.
52 Inserted by Act No. 41 of 1974, w.e.f. 1st. February, 1975.
53 Substituted by the Companies (Amendment) Act, 1988, w.e.f. 31st. May, 1991 for the words, brackets and figures "Without prejudice to the provisions of sub-section (4A), the Board, with the previous approval of the Central Government".
54 Substituted by Act No. 46 of 1977, for the words, brackets and figures "Chapter XXXV of the Code of Criminal Procedure, 1898, (5 of 1898)", w.e.f. 24th. December, 1977.
55 Substituted by the Companies (Amendment) Act, 1988, w.e.f. 31st. May, 1991 for sub-sections (5) and (6)
56 Inserted by the Companies (Amendment) Act, 1988, w.e.f. 31st. May, 1991.
56A The words "one thousand rupees" substituted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
57 The word "and" omitted by Act No. 31 of 1965, w.e.f. 15th. October, 1965.
58 Substituted for clause (c), ibid, w.e.f. 15th. October, 1965.
59 Inserted, w.r.e.f. 14th. January, 1969.
60 Inserted, w.r.e.f. 1st. November, 1973.
61 Substituted by Act No. 41 of 1974, for the word "Court", w.e.f. 1st. February, 1975.
62 Substituted by the Companies (Amendment) Act, 1996, w.e.f 1st. March, 1997
63 Substituted by Act No. 65 of 1960.
64 The words "either wholly or in part, and" omitted by the Companies (Amendment) Act, 1996, w.e.f. 1st. March, 1997.
64A Section 17A inserted by the Companies (Amendment) Act, 2000 shall come into force w.e.f. the date to be notified.
65 Substituted by the Companies (Amendment) Act, 1996, w.e.f. 1st. March, 1997
66 Inserted by Act, 65 of 1960.
67 Substituted by Act No. 65 of 1960, for sub-section (2).
68 Inserted by Act No. 31 of 1965, w.e.f 15th. October, 1965.
68A The words "one hundred rupees" substituted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
68B Inserted by the Trade Marks Act, 1999.
69 Substituted by Act No. 65 of 1960, for sub-section (6).
70 Sub-section (8) substituted, ibid.
70A The words "five hundred rupees" substituted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
71 Inserted by Act No. 65 of 1960.
72 Inserted by Act No. 65 of 1960.
73 Inserted by Act No. 65 of 1960.
74 Substituted for clause (c) by the Companies (Amendment) Act, 1988, w.e.f. 15th. June, 1988
75 Substituted by the Companies (Amendment) Act, 1988, w.e.f. 15th. June, 1988 for the words "a chartered accountant practising in India".
76 The words "managing agent, secretaries and treasurers" omitted by the Companies (Amendment) Act, 1988, w.e.f. 15th. June, 1988.
77 Inserted by the Companies (Amendment) Act, 1988, w.e.f. 15th. June, 1988.
78 Substituted by Act No. 65 of 1960, for the proviso.
79 Clause (c) omitted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
79A The words "fifty rupees" substituted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
79B Omitted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
79C The words "ten rupees" substituted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
80 Substituted by Act No. 65 of 1960, for the word "agrees".
81 Substituted for the word "Court" by the Companies (Amendment) Act, 1988, w.e.f. 31st. May, 1991.
82 Inserted by Act No. 65 of 1960.
83 Inserted by the Companies (Amendment) Act, 1988, w.e.f. 15th. June, 1988.
83A Sub-section (11) inserted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
84 Inserted by Act No. 41 of 1974, w.e.f. 1st. February, 1975.
85 Substituted by the Companies (Amendment) Act, 1988, w.e.f. 15th. June, 1988 for the words "less than rupees one crore".
85A Sub-section (2A) inserted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
86 Sub-sections (6) & (7) omitted by the Companies (Amendment) Act, 1988, w.e.f. 15th. June, 1988.
87 The word "or" omitted by the Companies (Amendment) Act, 1988, w.e.f. 15th. June, 1988.
88 Clause (b) omitted by the Companies (Amendment) Act, 1988, w.e.f. 15th. June, 1988.
89 Substituted by the Companies (Amendment) Act, 1988, w.e.f. 15th. June, 1988 for the words "rupees one crore or more".
90 Substituted by Act No. 31 of 1965 for the word "fourteen", w.e.f. 15th. October, 1965.
91 Inserted by Act No. 65 of 1960.
91A The words "five hundred rupees" substituted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
91B The words "five thousand rupees" substituted by the Companies (Amendment) Act, 2000, w.e.f. 14th. December, 2000.
92 The words "expressly described as a nominee of the company" omitted by section 15, ibid.
93 Substituted by Act No. 65 of 1960, for the words "with a Scheduled Bank".
94 Substituted by the Companies (Amendment) Act, 1988, w.e.f. 31st. May, 1991 for the word "Court".
95 The words "unless the contrary is proved", omitted by Act No. 65 of 1960.