Companies Act 2013

Companies Act 2013 timeline

2004
Concept
paper

8 Aug 2013
Rajya Sabha

29 Aug 2013
Presidents
Assent

2004 J J
Irani expert
committee

18 Dec 2012
Lok Sabha

12 Sep 2013
98 sections
notified

2008
Companies
Bill 2008

2012 Companies
Bill 2012

What next?

2009
Companies
Bill 2009

2011Companies
Bill 2011

Companies Act, 2013: A

statistical snapshot
Number of schedules : 7
Number of chapters: 29
Number of sections: 470

 Definition of Company :-Company

means a company incorporated under
this Act or under any previous company
law.
Characteristics :
Separate legal entity
Limited liability
Perpetual Succession
Common Seal
Transferability of shares
Separate Property
Capacity to sue

Types of Company

Public Limited Company

Private Limited company
One Person Company
Small Company
Dormant Company

Private company

Section2(68) private company means a

company having a minimum paid-up share
capital of one lakh rupees or such higher
paid-up share capital as may be prescribed,
and which by it articles,
(i) restricts the right to transfer its shares;
(ii) except in case of One Person Company,
limits the number of its members to two
hundred;

 Provided that where two or more persons hold

one or more shares in a company jointly, they
shall, for the purposes of this clause, be treated
as a single member
Provided further that
(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, shall not be included in the number of
members; and
(iii) prohibits any invitation to the public to
subscribe for any securities of the company

Public Company

Section 2(71) public company means a

company which
(a) is not a private company;
(b) has a minimum paid-up share capital
of five lakh rupees or such higher paid-up
capital, as may be prescribed:
Provided that a company which is a
subsidiary of a company, not being a
private company, shall be deemed to be
public company for the purposes of this
Act even where such subsidiary company
continues to be a private company in its
articles

 Mr.Kumar is director of a private

company (XYZ) situated in Delhi
which is subsidiary of ABC limited.As
the articles of association clears that
the XYZ is purely private
company.But there is some penal
actions on XYZ company considering
as deemed public company.The XYZ
filed against penal action stating to
MCA that it is a purely private
company & the charges levied on it
is considering it as Public company. Is

 Whether the subsidiary of a foreign

company be termed as public company
or private company as per the
Companies Act, 2013.
In terms of MCA General Circular no. 23/2014
dated 25th June 2014, an existing company,
being a subsidiary of a company incorporated
outside India, registered under the Companies
Act, 1956, either as private company or a
public company by virtue of section 4(7) of
that Act, will continue as a private company or
public company as the case may be, without
any change in the incorporation status of such
company.

One Person Company

Section2(62) One Person Company

means a company which has only one
person as a member.
Waives
a
number
of
compliance
requirements.
Lives on even after the death/disability of
the sole member.
OPC registered with one member.
Appointment of another person as a
nominee member in the event of the
subscribers death or his incapacity
Only natural person who is an Indian
citizen and resident in India is eligible to
incorporate OPC.
11

Small Company

2(85) small company means a company,

other than a public company,
(i) paid-up share capital of which does not
exceed fifty lakh rupees or such higher
amount as may be prescribed which shall not
be more than five crore rupees; or
(ii) turnover of which as per its last profit and
loss account does not exceed two crore
rupees or such higher amount as may be
prescribed which shall not be more than
twenty crore rupees:
Provided that nothing in this clause shall apply
to
(A) a holding company or a subsidiary company;

Dormant Company

Dormant company: The 2013 Act states

that a company can be classified as
dormant when it is formed and registered
under this 2013 Act for a future project or
to hold an asset or intellectual property
and has no significant accounting
transaction. Such a company or an
inactive one may apply to the ROC in such
manner as may be prescribed for
obtaining the status of a dormant
company.[Section 455 of 2013 Act]
13

Dormant company

Who can attain status of a dormant company?

Companies;
Formed for a future project, or to hold and
asset / intellectual property and has no
significant accounting transactions
Not carrying out any significant business or
operation, or has not made any significant
accounting transaction, or has not filed
financial statements / annual returns for 2
years
Special resolution in AGM / confirmation from at
least 3/4th shareholders (by value) required to
apply for being dormant company
Certain additional conditions prescribed for
14
company to be eligible to make application
to

Dormant company

Concessions to dormant companies

Dormant company not required to prepare
cash flow statement
Dormant company to conduct at least 2 Board
meetings in a calendar year (with gap of 90
days between 2 meetings)
Rotation of auditors not applicable
Limitations
ROC to initiate process of striking off name of
company in case it remains dormant for
consecutive 5 years
Return to be filed within 30 days of end of
financial year of financial position duly
15
audited by CA

One Person Company

Simpler legal and governance regime for

operation and maintenance
Waives
a
number
of
compliance
requirements.
Lives on even after the death/disability of
the sole member
OPC registered with one member
Appointment of another person as a
nominee member in the event of the
subscribers death or his incapacity
Only natural person who is an Indian
citizen and resident in India is eligible to
incorporate OPC.

Types of OPC

a company limited by shares; or

a company limited by guarantee; or
an unlimited company.

Appointment of directors

Articles of a company may provide for the

appointment of the first directors
If articles are silent then the subscriber to
the memorandum who is an individual shall
be deemed to be the first director of the
company
May have a single director
Maximum-15 directors more than 15 after
passing Special Resolution
Director must have stayed in India for a
total period of not less than 182 days in the
previous calendar year

Meetings of Board

At least one meeting of the Board of

Directors to conducted in each half of
a calendar year
Gap between the two meetings
should not be less than ninety days
Exemption if company has only one
director.

Contract by One Person Company

One Person Company limited by shares or by guarantee

enters into a contract with the sole member of the
company who is also the director of the company, the
terms of contract or offer are in writing or contained in
a memorandum or recorded in the minutes of the
Board meeting held next after entering into the
contact.
Inform the Registrar about every contract entered into
by the company within a period of fifteen days of the
date of approval by the Board of Directors.
Contracts in ordinary course of business not required to
comply with the above.

Financial Statement

The financial statement, signed by one

director, for submission to the auditor for
his report thereon.
Board of Directors Report means a report
containing explanations or comments by the
Board on every qualification, reservation or
adverse remark or disclaimer made by the
auditor in his report.
Filed with ROC within 180 days from the
closure of the financial year
Financial statement, may not include the
cash flow statement

Exemption

Section 96. Option to dispense with the requirement of holding an

AGM

Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section

98. Power of Tribunal to call meetings of members

100. Calling of extraordinary general meeting.
101. Notice of meeting.
102. Statement to be annexed to notice.
103. Quorum for meetings.
104. Chairman of meetings
105.Proxies
106. Restriction on voting rights
107. Voting by show of hands
108. Voting through electronic means
109. Demand for poll
110.Postal ballot
111. Circulation of members resolution

Restrictions

Such Company cannot be incorporated or

converted into a company under section 8
of the Act.
Such Company cannot carry out NonBanking Financial Investment activities
including investment in securities of
anybody corporates.
No such company can convert voluntarily
into any kind of company until expiry of 2
years from the date of incorporation, except
in cases where capital or turnover threshold
limits are reached.
No minor shall become member or nominee
of the One Person Company or hold share
with beneficial interest.

Conversion of OPC

Where the paid up share capital exceeds fifty lakh

rupees or its average annual turnover during the
relevant period exceeds two crore rupees
OPC to convert itself, within 6 months of the date
on which its paid up share capital is increased
beyond fifty lakh rupees or the last day of the
relevant period during which its average annual
turnover exceeds two crore rupees, into either a
private company with minimum of two members
and two directors or a public company with at
least of seven members and three directors in
accordance with the provisions of section 18 of
the Act

Conversion of private company into One Person Company

A private company other than a

company registered under section 8
of the Act may convert itself into OPC
by passing a special resolution in the
general meeting.
AND after obtaining a NOC from all
its members and creditors.

Other features of OPC

OPC to lose its status if paid up capital

exceeds Rs. 50 lakhs or average annual
turnover is more than Rs. 2 crores in 3
immediately
preceding
consecutive
years.
Mandatory rotation of auditor after
expiry of maximum term is not
applicable.
The annual return of a One Person
Company shall be signed by the
company secretary, or where there is
no company secretary, by the director

 Can a company form a One

Person Company (OPC) as its
subsidiary?

 In terms of rule 3 of the Companies

(Incorporation) Rules, 2014, only a
natural
person who is an Indian citizen and
resident in India is eligible to incorporate
OPC.
Therefore, the question of any body
corporate or other form of organizations
being the single member does not arise

SMALL COMPANY

Small Company
The concept of Small Company has
been introduced for the first time by the
Companies Act, 2013.
The Act identifies some companies as
small companies based on their capital
and turnover for the purpose of
providing certain relief/exemptions to
these companies.
Most of the exemptions provided to a
small company are same as that
provided to a One Person Company.

Small Company - Section

2 (85)
A company, other than a public company,
1. paid-up share capital of which does not
exceed Rs. 50 lakh or such higher amount as
may be prescribed which shall not be more
than Rs. 5 crore; or
2. turnover of which as per its last P&L A/c does
not exceed Rs. 2crore or such higher amount
as may be prescribed which shall not be
more than Rs. 20 crore
Provided that nothing in this clause shall apply
to
(A) a holding company or a subsidiary
company;
(B) a company registered under section 8; or
(C) a company or body corporate governed

Salient Features
Only a private company can be classified as a small
company.
Holding company, subsidiary company, charitable
company and company governed by any Special Act
cannot be classified as a small company.
For a small company, either the paid up capital should not
exceed Rs. 50 lakhs or the turnover as per latest
statement of profit & loss should not exceed Rs. 5 crores.
The status of a company as Small Company may
change from year to year. Thus the benefits which are
available during a particular year may stand withdrawn in
the next year and become available again in the
subsequent year.

Special Provisions and

Exemptions
Privileges/exemptions available to a small
company are same as OPC.
The annual return of a Small Company can
be signed by the company secretary
alone, or where there is no company
secretary, by a single director of the
company.
A small company may hold only two board
meetings in a year, i.e. one Board Meeting
in each half of the calendar year with a
minimum gap of ninety days between the
two meetings.

Special Provisions and

Exemptions
A small company need not include Cash Flow
Statement as a part of its financial statements.
Provision regarding mandatory rotation of auditor
not applicable to a small company.
Holding and subsidiary companies are specifically
excluded from the concept of small company.
In other words, a holding or a subsidiary company
can never enjoy the privileges of a small
company even though they may fulfill the capital
or turnover requirement of a small company.

 Whether a private Company

having paid-up share capital of
rupees 45 lakhs and turnover of
Rs. 20 crores as per last audited
balance sheet will be treated as
small company?

Incorporation of
Companies

Stages in Company Incorporation

Promotion
Registration
Floatation
Commencement of Business

37

 A company comes into existence is generally by a

process referred to as incorporation. Once a company
has been legally incorporated, it becomes a distinct
entity from those who invest their capital and labour to
run the company.
Usually the first step to form a company is the process
known apromotion where a person persuades others
to contribute capital to a proposed company before it is
incorporated . Such a person is called the promoter of
the company.
Promoters also can enter into a contract on behalf of a
company before or after it has been granted a
certificate of incorporation, and arrange share issues in
the name of the company
38

 Definition : Section 2 (69) of the Companies Act, 2013 defines

the term promoter as under: Promoter means a person
(a) who has been named as such in a prospectus or
is identified by
the company in the annual return referred to in
section 92; or
(b) who has control over the affairs of the company,
directly or
indirectly whether as a shareholder, director or
otherwise; or
(c) in accordance with whose advice, directions or
instructions the
Board of Directors of the company is accustomed to
act.
Provided that sub-clause (c) shall not apply to a

 Fiduciary Position of Promoter in

company:1)Not to make any secret profit at the
expense of the company
2)To give benefit of negotiations to the
company
3)To make full disclosure of interest or profit
4)Not to make unfair use of position.
Position of promoters as regard preincorporation contracts:1)Company not bind by pre-incorporation
contract

Case studies

Mr.Vikram is the promoter of Abascus Ltd.He

entered into an agreement with Real estate
dealer to buy an land on the behalf of the
company on 15th july 2014.The Registrar of
companies issued him certificate of
incorporation on 22nd october 2014.After
Incorporation company refuses to buy the said
plot of land.Has the real estate dealer has an
remedy against the promoter or against the
company?
Mr Sinha(Corporate Professional) prepares an
AOA & MOA on the instructions of the promoter
of company.He also paid the registration fees &
got the company registered.Mr Sihna filed a

Incorporation of Company

42

Steps to be followed while Incorporation

1) Obtain Digital Signatures: Nowadays various

document prescribed under the Companies Act,
2013, are required to be filed with the digital
signature of the Managing Director or Director or
Manager or Secretary of the Company, therefore,
it is compulsorily required to Obtain a Digital
Signature Certificate from authorized DSC issuing
authority for at least one director to sign the Eforms related to incorporate like form INC.1 and
other documents.
.

 Digital Signature Certificates (DSC) are the digital

equivalent (that is electronic format) of physical
or paper certificates. Examples of physical
certificates are drivers' licenses, passports or
membership cards. Certificates serve as proof of
identity of an individual for a certain purpose; for
example, a driver's license identifies someone
who can legally drive in a particular country.
Likewise, a digital certificate can be presented
electronically to prove your identity, to access
information or services on the Internet or to sign
certain documents digitally

2) Obtain Director Identification Number

[Section 153]
As per 153 of the Companies Act, 2013, every
individual intending to be appointed as director of a
company shall make an application for allotment of
Director Identification Number in form DIR.3 to the
Central Government in such form and manner and
along with such fees as may be prescribed.
Therefore, before submission of e-Form INC.1 for
availability of name, all the directors of the proposed
company must ensure that they are having DIN and if
they are not having DIN, it should be first obtained

 What is the procedure of obtaining DIN?

Any person intending to apply for DIN shall have
to make an application in eForm DIR-3 and should
follow the following procedure:
1. eForm DIR-3 has to follow the online e-Filing
process .
2. Attach the photograph and scanned copy of
supporting documents i.e. proof of identity, and
proof of residence as per the guidelines. Physical
documents are not required to submit at DIN cell.
3. Along with the supporting documents,
Verification as per Form DIR-4 shall also be
attached. This shall contain the Name, Fathers
name, date of birth and text of declaration and
physical signature of the applicant.

 4. The eForm shall have to be digitally signed and shall be

uploaded on MCA21 portal.
5. Upon upload, Pay the fees for eForm DIR-3. Only
electronic payment of the fees shall be allowed (I.e.
Netbanking / Credit Card). No challan payment will be
accepted under revised procedure of DIN allotment.
The applicant is required to get himself/herself registered
on the MCA21 Portal to obtain login id, which is necessary
for payment of the fees. After obtaining the login-id, Login
to the MCA21 portal and click on 'eForm upload' link
available under the 'eForms' tab for uploading the eForm
DIR-3 . eForm DIR-3 will be processed only after the DIN
application fee is paid.
6. Upon upload and successful payment,
Form DIR-3 is mandatorily to be signed by an Applicant and
a practicing professional or secretary (who is a member of
ICSI) in whole time employment or the Director of the
existing company

 7. Processing of e Form DIR-3

In case, DIR-3 gets certified by the professional
(i.e. CA(in whole time practice)/ CS(in whole time
practice)/ CWA (in whole time practice)/, the DIN
will be approved by the system immediately
online (in case it is not potential duplicate).
8. Post-approval changes in particulars of Form
DIR-3
If there is any change in the particulars submitted
in eform DIR-3, applicant can submit e-form DIR-6
online. For instance in the event of change of
address of a director, he/ she is required to
intimate this change by submitting eform DIR-6
along with the required attested documents

3.Nameavailabilityforproposedcompany
As per section 4(4) read with Rule-9 of Companies
(Incorporation) Rules, 2014, application for the
reservation/availability of name shall be in Form no. INC.1
along with prescribed fee of Rs. 1,000/-. In selection of
Company name should be in accordance with name guidelines
given in Rule-8 of Companies (Incorporation) Rules, 2014.
After approval of name ROC will issue a Name availability
letter w.r.t. approval for availability of name for a proposed
company.
Validity of Name approved by ROC: As per section 4(5),
maximum time for which name will be available has been
prescribed in the law itself under section 4(5). The name will
be valid for a period of 60 Days from the date on which the
application for Reservation was made.

 4.PreparationoftheMemorandumofAssociation
(MOA)andArticlesofAssociation(AOA)
Drafting of the MOA and AOA is generally a step subsequent
to the availability of name made by the Registrar. It should be
noted that the main objects should match with the objects
shown in e-Form INC.1. These two documents are basically
the charter and internal rules and regulations of the company.
Therefore, it must be drafted with utmost care and with the
advice of the experts and the other object clause should be
drafted in a very broader sense.
As per section 4(6) the memorandum of a company shall be in
respective forms specified in Tables A, B, C, D and E in
Schedule I as may be applicable to such company.
As per section 5(6) the articles of a company shall be in
respective forms specified in Tables F, G, H, I and J in
Schedule I as may be applicable to such company.

 5. Application for incorporation of a company

application for incorporation of a private and Public company,
with the Registrar, within whose jurisdiction the registered
office of the company is proposed to be situated, shall be filed
in Form no. INC 7 [Rule 12 to 18] along with Form no. INC.22
for situation of registered office of the Company,
Declaration in Form No. INC-8 by Professionals. (As per
Rule-14 of Companies (Incorporation) Rules, 2014, A
declaration in the prescribed form by an advocate, a CA, CMA
or CS in practice who is engaged in the formation of the
company, and by a person named in the articles as a director,
manager or secretary of the company, that all the requirements
of this Act and the rules made there under in respect of
registration and matters precedent or incidental thereto have
been complied with;)

 Affidavit from each of the subscriber to the Memorandum in

Form No. INC-9 , (an affidavit from each of the subscribers to
the memorandum and from persons named as the first
directors, if any, in the articles that he is not convicted of any
offence in connection with the promotion, formation or
management of any company, or that he has not been found
guilty of any fraud or misfeasance or of any breach of duty to
any company under this Act or any previous company law
during the preceding five years and that all the documents filed
with the Registrar for registration of the company contain
information that is correct and complete and true to the best of
his knowledge and belief;)

 Formno.INC22:AsperRule25ofverificationof
registeredoffice
Section 12(2) of the Companies Act, 2013 states that
the Company shall furnish to the Registrar
verification of its registered office within a period of
thirty days of its incorporation in such manner as may
be prescribed.
Section 12(4) of the Companies Act, 2013 states that
Notice of every change of the situation of the
registered office, verified in the manner prescribed,
after the date of incorporation of the company, shall
be given to the Registrar within fifteen days of the
change, who shall record the same.

Incorporation of OPC

1) Application for DIN

2) Name Availability:After obtaining name
availability, within 60 days its required to file
incorporation documents with ROC.
3)Filing Incorporation form:
E-form INC-2- Application for Incorporation
E-form INC-3 Nominee consent form.
E- Form - INC-22 Situation of Registered
office
E-form INC-9- Affidavit from subscriber of
memorandum.
E-form INC-10- form of verification of
signature of subscriber.
DIR-12- Consent of Director
MOA & AOA.
4)Certificate of Incorporation The register

Sr. Nature of E-Forms

Form No.
No.
1.
Applicationforreservationofname INC.1

Due Date Of Filing

2.

Applicationforincorporation

INC.2

60days

3.

NomineeConsentForm

INC.3

15days

4.

ChangeinMember/Nominee

INC.4

30days

5.

Intimationofexceedingthreshold INC.5
i.e.ceasedtobeOPC

60days

6.

OPCApplicationforconversion

INC.6

NA

7.

FilingofSpecialResolution

MGT.14

30days

8.

ApplicationforDIN

DIR3

NA

9.

VerificationforDIN

DIR4

NA

NA

Memorandum & Articles of

Association

 The Memorandum of Association is the charter of a

company. It is a constitution document, which
amongst other things, defines the area within
which the company can operate.
As per section 2(56) memorandum means the
memorandum of association of a company as
originally framed or as altered from time to time in
pursuance of any previous company law or of this
Act.
The company cannot depart from the provisions of
the memorandum. If it enters into a contract or
engages in any trade or business which is beyond
the powers conferred on it by the memorandum,
such a contract or the act will be ultra-vires
(Beyond Powers) the company and hence void.

Model Forms of Memorandum

Table A is applicable in the case of companies
limited
by shares;
Table B is applicable to companies limited by
guarantee not having a share capital;
Table C is applicable to the companies limited
by guarantee having a share capital;
Table D is applicable to unlimited companies
not having a share capital;
Table E is applicable to unlimited companies
having a share capital.

Name Clause

A company being a legal entity must have a name of its own to

establish its separate identity.
The name of the company is a symbol of its independent
corporate existence.
The first clause in the memorandum of association of the
company states the name by which a company is to be known.
The company may adopt any suitable name provided it is not
undesirable.
It should be published & engraved in all documents alongwith
theCINNo.
in case of One Person Company, the words One Person
Company shall be mentioned in brackets below the name of
such company, wherever its name is printed, affixed or engraved.

 Rectificationofnameofacompany(Section16): Section 16 provides that if by inadvertence or

otherwise a name has been registered which is
identical to or too nearly resembles the name of an
existing company whether registered under this Act
or the previous company law, the Central
Government may direct thecompany to change its
name.
The company shall change its name within a period
of 3 months from the issue of the above direction
after passing an ordinary resolution for the purpose.

SituationClause
The name of the State in which the registered office
of the company is to be situated must be given in the
memorandum. But the exact address of the registered
office is not required to be stated therein. Within 15
days of it incorporation, and at all times thereafter,
the company must have a registered office to which
all communications and notices may be sent

ObjectsClause
Under section 4(1)(c)of the Companies Act,
2013, all companies must state in their
memorandum the objects for which the
company is proposed to be incorporated and
any matter considered necessary in furtherance
thereof.

LiabilityClause
The fourth compulsory clause must state that liability of the
members is limited, if it is intended that the company be limited
by shares or by guarantee. The effect of this clause is that, in a
company limited by shares, no member can be called upon to pay
more than what remains unpaid on the shares held by him.
The fifth compulsory clause which must state the amount of the
capital with which the company is registered, unless the
company is an unlimited liability company. The shares into
which the capital is divided must be of fixed value, which is
commonly known as the nominal value of the share. The capital
is variously described as nominal, authorised or registered

 DeclarationforSubscription:-(INC-13)
The statutory requirements regarding
subscription of memorandum are that:
each subscriber must take at least one share;
each subscriber must write opposite his name
the number of shares which he agrees to take.
Signing&StampingofMemorandum

ArticlesofAssociation
The articles of a company shall be in respective forms
specified in Tables, F, G, H, I and J in Schedule I as may
be applicable to such company.
In terms of section 5(1), the articles of a company shall
contain the regulations for management of the company.
The articles of association of a company are its bye-laws
or rules and regulations that govern the management of
its internal affairs and the conduct of its business.
They are subordinate to and are controlled by the
memorandum of association.

Entrenchment
The entrenchment provisions allow for certain clauses in the
articles to be amended upon satisfaction of certain conditions
or restrictions (such as obtaining a 100% consent) greater than
those prescribed under the Act.
This provision acts as a protection to the minority shareholders
and is of specific interest to the investment community
WhencanaCompanyaddprovisionsforentrenchmentto
AOA?
(1) Either on formation of a company, or
(2) by an amendment in the articles
In the case of a private company the amendment has to be
agreed to by all the members of the company;
In the case of a public company by a special resolution.

Contents of Articles

Adoption of preliminary contracts.

3. Number and value of shares.
4. Issue of preference shares.
5. Allotment of shares.
6. Calls on shares.
7. Lien on shares.
8. Transfer and transmission of shares.
9. Nomination.
10. Forfeiture of shares.
11. Alteration of capital.
12. Buy back.
13. Share certificates.
14. Dematerialisation.
15. Conversion of shares into stock.

Alteration of MOA
1)AlterationofNameClause: Special resolution to be filed by company FormNo.
MGT-14(Special resolution)
Approval from central government in writing
Once approval granted within specific time period the
formno.INC-25(Certificate of incorporation pursuant
to name change) will be issued.
Its not applicable to those company who default in
filing annual returns or deposit or debentures or interest
thereon.

2)AlterationofRegisteredOfficeClause:Change within the local limits of same town Board Resolution filed by company.
Notice to ROC in form No. INC-22

Change from one city to another within the same State Special Resolution filed by company(MGT-14)
Notice to ROC in form No. INC-22

Change within the same State from the jurisdiction of

one Registrar of Companies to the jurisdiction of
another Registrar of Companies Confirmation by Regional Director.
Special Resolution filed by company(MGT-14)
Notice to ROC in form No. INC-22

Change of Registered office from one State to

another Application by Central Government.
Special Resolution filed by company(MGT14)
Notice to ROC in form No. INC-22

AlterationofObjectsClause&Liability
Clause: By passing an special resolution (Form
No.MGT-14)
AlterationofCapitalClause: By passing an ordinary Resolution

Alteration of AOA
A company has a statutory right to alter its
articles of association.
But the power to alter is subject to the
provisions of the Act and to the conditions
contained in the memorandum.

 XYZ limited is shifting their registered

office from Mumbai to Pune. The
company took approval from
shareholders & filed MGT-14 along
with INC-22 with ROC.But ROC has
not approved the form mentioning
that they did not took approval from
authority.Is any remedy available to
Company?

Prospectus & Allotment of

Securities

Chapter III
The act governs the issue of not only shares but all types of
securities.
Companies may now issue Global Depository Receipt by
passing the special resolution and subject to such conditions as
may be prescribed.
The content to be prescribed the Prospectus has now been
made more detailed.

Raising of Capital From

Public

The companies can raise money by

offering securities for sale to the
public.
They can invite the public to buy
shares, which is known as public
issue.
For this purpose the company may
issue a prospectus, which may
include a notice circular,
advertisement or other documents
which are issued to invite public
deposits.

 Public Company may issue

securities:-Through prospectus
-Through private placement
- Through right issue or bonus issue.
Private Company may issue
securities:-Through private placement
- Through right issue or bonus issue.

Prospectus
Sec2(70) prospectus means any
document described or issued as a
prospectus and includes a red herring
prospectus referred to in section 32 or
shelf prospectus referred to in section 31
or any notice, circular, advertisement or
other document inviting offers from the
public for the subscription or purchase of
any securities of a body corporate
It is an invitation issued to the public to
purchase or subscribe shares or
debentures of the company.

Contents of the prospectus

General information
Capital structure
Terms of present issue
Management and projects
Management and perception of risk
factor
It is compulsory to register the
prospectus with the Registrar

Process of filing Prospectus

Draft Offer document SEBI
Offer document ROC/Stock
exchange.
Red hearing prospectus. ROC/Stock
exchange.

Red Hearing Prospectus

Red herring prospectus means a prospectus

which does not include complete particulars of
the quantum or price of the securities included
therein.
The company shall file red herring prospectus
with Registrar of companies at least three days
before the opening of the subscription list and
the offer.
A red herring prospectus shall carry the same
obligation as are applicable to a prospectus. In
case there is any variation between red herring
prospectus and a prospectus shall be highlighted
as variation in the prospectus.

ISSUE OF APPLICATION FORMS

AND ABRIDGE PROSPECTUS
Every application form for the
purchase of the securities of a
company shall be issued unless the
form is accompanied by an Abridge
Prospectus
There is no need for abridge
prospectus in case of:
a) Underwriting Agreement; and
b) Private placement.

Private Placement
When an issuer makes an issue of
securities to a select group of
persons not exceeding 200, which is
neither right issue or bonus issue,it is
called private placement. It is of two
types: Preferential allotment
Qualified Institutional placement(QIP)

Conditions to be fulfilled
Approval of shareholders-Special
resolution.
Invitation to not more than 200
persons in any financial year.
Value of such offer per person should
not be less than twenty thousand
of the face value of securites.

Shelf Prospectus
It means a prospectus in respect of which the
securities or class of securities included therein
are issued for subscription in one or more issues
over a certain period without the issue of a
further prospectus.
Any class of company may file a shelf prospectus
with the Registrar of Companies at the stage of
first offer of securities.
The shelf prospectus shall indicate that validate
period of the shelf prospectus is a period not
exceeding one year from the date of first offer of
securities under that prospectus. Once, a shelf
prospectus has been issued, there will be no
requirement of any further prospectus for any
subsequent offer of these securities issued
during this validity period.

 For any subsequent issue, company shall

file an Information Memorandum. This
information memorandum shall contain all
material facts relating to (i) new charges
created; and (ii) changes in financial
position of the company from first/previous
offer to this second/subsequent offer under
this Shelf Prospectus.
When an offer of securities is made on
shelf prospectus, the information
memorandum together with shelf
prospectus shall be deemed to be a
prospectus.

Civil Liability for Misstatements

In case of any untrue statement in the prospectus

The liability will be on the director of

the company , whose name was
written during the time of issue
The persons who have authorized
their names to be theirs in the
prospectus to be named as directors
Promoter
Every person including the person
who is an expert and has authorized
his name to be issued with the
prospectus

 If a prospectus is issued in contravention of

the provisions of section 26, the company
shall be punishable with fine which shall
not be less than fifty thousand rupees
but which may extend to three lakh
rupees and every person who is knowingly
a party to the issue of such prospectus
shall be punishable with imprisonment for a
term which may extend to three years or
with fine which shall not be less than fifty
thousand rupees but which may extend
to three lakh rupees, or with both

 Mr.X filed a case against ABC limited fort the

misrepresentation of prospectus. Plaintiff
received a prospectus regarding the
incorporation of Defendants company, which
highlighted that the company would have the
right to use steam or mechanical power. After
receiving the prospectus, Plaintiff bought shares
of the company, relying on the allegations of the
prospectus, and believing that the company had
the absolute right to use steam or mechanical
power. The board of trade refused to allow steam
or mechanical power, and the company was
wound up, unable to complete its work.The
plaintiff can get remedy against it?

 A purchased from B 1000 shares of a

company on the basis of prospectus
containing wrong statements.
What remedies are available to A
against the company?
If there is privities of contract between
A and B then what will be your
argument?

Chapter IV-

Share Capital and

Debentures

ILLUSTRATION
A company is registered with a capital of
Rs. 1,00,000 divided into 10,000 shares of
Rs. 10 each. The authorized capital of the
company in such a case is Rs. 1,00,000.
The company offers 8,000 shares to the
public which takes them up. The issued
capital of the company is Rs. 80,000. The
calls up only Rs 6 per share. In such a
case the called up capital is Rs. 48,000
and the uncalled capital is Rs. 32,000.

Public
Companies

Public
Issue

Private

Placement

Private Companies

Right & Bonus

Issue

Private
Placemen
t

Right & Bonus

Issue

 Condition for voting rights to Preference Shareholders

has been changed. Now preference shareholders can
vote on all resolution placed before the company when
dividends payable in respect of a class of preference
shares are in arrears for a period of 2 years or more.
Company cannot issue shares at discount other
than as sweat equity, no provision has been provided
for any approval.
A company may issue preference shares redeemable
after 20 years for such infrastructure projects as may
be specified subject to redemption of specified % of
preference shares on annual basis at the option of the
preference shareholder.

Kinds of Share Capital

The share capital of a company limited
by shares shall be of two kinds, namely:

(a) Equity share capital

(i) with voting rights; or
(ii) with differential rights as to
dividend, voting or otherwise in
accordance with such rules as may be
prescribed; and
(b) Preference share capital:

Equity Shares with

Differential Rights

Both Public and Private companies are continued to be permitted.

Conversion of existing equity share capital with voting rights into equity
share capital carrying differential voting rights and viceversa not
permitted
Differential rights can be with respect to dividend, voting or otherwise,
only if:
-Authorisation by Articles and Shareholders by SR;
-Upto 26% of the total post-issue paid up equity share capital including
equity shares with differential rights issued at any point of time;
-Track record of dividend payment in last 3 immediate last FYs
-No default in filing Accounts and Annual Return in 3 immediate last FYs
-No default in payment of dividend, debentures, deposit, preference shares,
loan from bank/FIs, statutory dues of employees. Principle and
Interest/Dividend both
-No default under SEBI, SCRA, FEMA and RBI Act

 DVR shares were allowed in India in 2000

DVR shares are like ordinary shares, but
with fewer voting rights. These allow a
company to
dilute equity without a matching reductio
n
in promoters' stake. The aim of limiting
voting rights is preventing hostile
takeovers by separating economic
interests and voting rights.
DVR shares are priced lower at issuance
and offer higher dividends; in return, the
voting rights are limited.

 Tata Motors:
In 2008, Tata Motors became the first company in India to
issue DVR shares. To fund the acquisition of Jaguar Land
Rover, it issued 6.4 crore DVR shares at Rs 305 a share
when the ordinary shares were at Rs 340. These DVRs
offer higher dividends but carry one-tenth the voting
rights of ordinary shares. This means 10 DVR shares equal
one ordinary share as far as voting rights are concerned
For instance, the holders of Tata Motors' DVR shares can
cast one vote for every 10 shares held. However, they get
5% more dividend than ordinary shareholders. On 18 July
2012, the company gave Rs 4.10 a share as dividend to
DVR holders and Rs 4 a share to ordinary shareholders.

 Pantaloon Retail India:

The company issued bonus shares that were DVRs in
February 2009. These carry one-tenth voting rights of
ordinary shares and pay 5% additional dividend.
Gujarat NRE Coke:
The company issued DVR shares in 2010. The investor has
to hold 100 DVR shares for getting voting rights equal to
one ordinary share.
Jain Irrigation:
Jain Irrigation is a leading player in the micro-irrigation
system market. The company issued DVR shares in
November 2011 in the form of bonus to its existing
shareholders. Its 10 DVRs entitle investors to one vote in
shareholder meetings.

 (i) Equity share capital, with reference to any

company limited by shares, means all share capital
which is not preference share capital;
Rights of Equity shareholder :a) Right of pre-emption in the matter of fresh issue.
b) Right to apply to the court to set aside the
variations to their rights to their detriment.
c) Right to receive a copy of statutory report before
holding of statutory meeting by public companies.
d) Right to apply to CLB(now NCLT) for calling of an
EGM,if company fails to call such a meeting.
e) Rights to receive annual accounts with auditors
report ,directors reports & other information.

 Preference share capital means

that part of the issued share capital
of the company which carries or
would carry a preferential right with
respect to
a)Payment of dividend
b)Repayment of the amount of
the share capital paid-up or deemed
to have been paid up

Restriction on Preference share:No company shall issue any preference

shares which are irredeemable

 Conditions to be complied with before

issuing preference shares
a) Articles of Association must authorize to
issue preference shares
b) Approval of members is sought by way of
special resolution in the general meeting
c) At the time of issue of preference shares,
- there should not subsist default in the
redemption of preference shares issued either
before or after the commencement of 2013 Act.
- no payment of dividend due on any
preference shares

 Maximum period upto which a

company limited by shares, can
issue redeemable preference
shares
Not exceeding 20 years from the
date of issue.
A company may issue preference
shares for a period exceeding 20
years but not exceeding 30 years for
infrastructure projects (Specified in
Schedule VI).

Sourcesforredemptionofpreferenceshares
Redemption of preference shares shall be made only from the
following;
i) Out of the profits of the company which would otherwise
available for dividend.
ii) Out of the proceeds of a fresh issue of shares made for the
purpose of such redemption.
A sum equal to the nominal amount of the shares to be
redeemed is to be transferred to a reserve called Capital
Redemption Reserve.
If redemption is at premium then premium amount out of the
profits of the company or securities premium account.

 Capital Redemption Reserve account

may be applied by the company, in
paying up unissued shares of the
company to be issued to members of
the company as fully paid bonus
shares.

 What is the position of a company when it

is unable to redeem any preference shares?
When a company is unable to redeem any
preference shares, it can issue further
redeemable preference shares equal to the
amount due, including the dividend thereon
subject to the following conditions;
i) With the consent of the preference
shareholders holding three-fourths in value; and
ii) With the approval of the Tribunal on a petition
made by it in this behalf.

 Votingonpreferenceshares:
Section 47 prescribes restrictions on voting rights of
preference shareholders. The preference shareholders can vote
only on those resolution which can directly affect their rights
attached to their shares.
It entitles a preference shareholder to vote on every resolution
placed before the company at any meeting if the company has
not paid the dividend in respect of a class of preference
shareholders for a period of consecutive 2 (two) or more years.

Thisisapplicabletobothpublic&private
companies

Further Issue of Capital

If company having share capital proposes to
increase its subscribed capital by the issue of
further shares.
Provisions relating to further issue of capital to be
applicable to all types of companies
Existing shareholders on proportionate basis
Apart from existing shareholders , shares may also
be offered to employees as ESOP
The condition of expiry of two years of formation of
company OR 1 year from.
Letter of offer shall be made limiting not less than
15 days & not more than 30 days.(if not accepted it
shall deemed to have been declined)

Preferential Basis

To any person (including existing shares) for cash or other

than cash, if:
-Special Resolution passed;
-Price determined by Registered Valuer
PreferentialOffermeans:
Issue of shares or other securitieses by a company to any
select person or group of person on preferential basis &
doesnot include public issue, PI, Bonus, ESOP, ESPS,Sweat
Equity, Depository receipt in India/Abroad
Inclue equity shares , PCD/NCD or any securities convertible
into equity at later date.
Allotment be completed within 12 months from the date of SR
Incase of convertible securities, the price of resultant share be
known beforehand.

Private Placement

Private Placement to be made through issue of offer letter.

- The offer to be made to maximum 50 persons at a time and not
more than to 200 persons in aggregate (excluding QIB and
ESOP), in a Financial Year.
- Such allotment of shares restricted to 4 in a Financial Year
and not more than once in a calendar quarter with a minimum gap
of 60 days between any 2 such offers or invitations.
- Value of such offer or invitation shall be with an investment
size of minimum Rs. 20,000 per person.
- Payment be made by subscribers Bank Account only. No
Cash payment
- S/R be passed

 - Allotment be completed within 60 days from date of receipt of

share application
else repay within 15 days from date of completion of 60 days.
- If unable to pay liable to repay interest @ 12% pa from expiry
of 60th day.
- Share application be kept in separate bank account and utiliize
only for issue of shares else repay is unable to allot
Ifmadetomorethan50personsorsuchhighernumberof
personsasmaybeprescribedshallbedeemedtobeanoffer
tothepublic.
Non-compliance to above lead to stringent penalty which may
extend to higher of:
Amount involved in Offer: or
Rs. Two Crores

Sahara Case:
Under the Act, 1956 the conditions relating to private
placement were applicable only to public companies.
on the contrary Act, 2013 provides various conditions
for private placement of shares and debentures which
apply to both private companies and public companies.
The conditions imposed in relation to private
placements by companies seem to have been issued
after the ruling of the Hon"ble Supreme Court of India
in the case of Sahara Group.
Sahara India Real Estate Corporation Limited ('SIRECL')
and Sahara Housing Investment Corporation Limited
('SHICL') issued unsecured optionally fully-convertible
debentures ("OFCDs") amounting to about Rs 24,000
crores to more than 2 crore investors

 When Securities Exchange Board of India ('SEBI'),

had came to know of the large scale collection of
money from the public by Sahara through
issuance of OFCDs, it issued a show cause notice
to SIRECL and SHICL inter alia stating that the
issuance of OFCD's are public issue and therefore
liable to be listed u/s 73 of Act, 1956 and also
directed to refund the money solicited and
mobilized through the prospectus issued with
respect to the OFCDs, since they had violated
various other clauses of the SEBI (Disclosure and
Investor Protection) Guidelines, 2000 and also
various provisions of the SEBI (Issue of Capital
and Disclosure Requirements) Regulations, 2009

 it was urged by the Sahara Group that

OFCDs were issued in the nature of "hybrid
instruments" as defined u/s 2(19A) the Act,
1956 and SEBI did not have jurisdiction to
administer those securities since Hybrid
securities were not included in the definition
of 'securities' under the Securities and
Exchange Board of India Act, 1992 ("SEBI
Act"), or the Securities Contract Regulation
Act, 1956 ("SCRA"), but would be governed
by the Central Government under section
55A(c) of the Act, 1956.

 The Supreme Court held that OFCDs issued

by Sahara Group were public issue of
debentures, hence securities and once the
number 49 is crossed, the proviso to
Section 67(3) becomes effective and it is
an issue to the public, which attracts
Section 73(1) of Act, 1956 and application
for listing becomes mandatory which falls
under the administration of SEBI u/s 55A(1)
(b) of the Act, 1956. The Court upheld the
proceedings of the SEBI and Sahara Group
was ordered to refund the amount to
investors along with interest

Sahara Case
Useoftermsecuritiesinsteadofshares Use of the term shares in the Companies Act,
1956 restricted regulations of issuances of
various other instruments by Company to raise
funds . Companiesmanipulatedthis
loopholebyusingotherterminologyor
nomenclatureforinstrumentsusedtoraise
funds,therebyeasilyescapingthe
regulatoryoversight.

Case:
Panacea Biotec Ltd has informed BSE that the
Company had allotted 3,43,00,000 , 0.5%, NonConvertible Cumulative Redeemable Preference
Shares (NCCRPS) of Rs.10 (Rupees Ten) each at
par aggregating to Rs. 34.30 on private placement
basis to the promotes of the Company in pursuance of
Special Resolution passed by the shareholders in their
Extra-Ordinary General Meeting held on January 06,
2015 at the Registered Office of the
Company.Further, the aforesaid shares are issued in
physical form and the Company does not intend to
list the aforesaid shares on Stock exchange(s).

Case 2:
Reliance Chemotex Industries Ltd has
informed BSE that a meeting of the
Board of Directors of the Company
will be held on January 17, 2015,
inter alia, for allotment of 3,00,000
10% Cumulative Redeemable
Preference Share of Rs.100 each.

Issue of shares at discount

Shares at Discount now not possible
except Sweat Equity Shares & dvrs.

Sweat equity shares

Sweat equity shares means such
equity shares, which are issued by a
Company to its directors or
employees at a discount or for
consideration, other than cash, for
providing their know-how or making
available rights in the nature of
intellectual property rights or value
additions, by whatever name called.

 Eligibility for Sweata) Permanent employee of the Company who has been
working in India or outside India, for at least last 1
year
b) Director of Company-Whole time director or not
c) An employee or a director as defined in sub-clauses
(a) or (b) above of a subsidiary (in India or outside
India) or of a holding Company.
Value Addition- Has been defined. It means actual
or anticipated economic benefits derived or to be
derived by Company from an expert or a professional
for providing know-how or making available rights in
the nature of intellectual property rights.
Authorisation by shareholders- Yes, prior
shareholders approval through special resolution is
required.

 Time limit for issuing Sweat:

Allotment of sweat equity shares shall
be made within 12 months from the
date of passing special resolution.
Time Gap- There should be at least
1 year between the commenced of
business and issue of such shares.
Valuation- Valuation of sweat
shares and intellectual property
rights(IPR)/know how/ value additions
shall be done by Registered Valuer.

 Limit on sweat equity: In a year, sweat

shares shall not exceed 15% of existing
paid up equity share capital or shares
having issue value of Rs. 5,00,00,000,
whichever is higher. However, it should not
exceed 25% of paid up equity capital of
Company at any time.
Mandatory lock-in period- 3 years from
the date of allotment. The fact that the
share certificates are under lock-in and the
period of expiry of lock in shall be
mentioned in prominent manner on share
certificate.

 Infosys Technologies, which proposed sweat

equity in 1998 and 1999, has issued options
worth Rs 5,000 crore.
AM Naik, chairman of Larsen & Toubro, holds
480,000 shares granted under sweat equity
valued at Rs 71 crore(as per 2009)
Anil Singhvi of Gujarat Ambuja Cement
BS Nagesh of Shopper's Stop
YC Deveshwar of ITC
KV Kamath and Lalita Gupte of ICICI Bank
Dipak Gupta and Shivaji Dam of Kotak Mahindra
Bank are among the few holding shares worth
over Rs 10 crore granted under sweat equity.

Issue of Bonus Shares

Issue of Bonus Shares can be made
out of:
-Free reserves; or
-the securities premium account; or
-capital redemption reserve account

 Decision of issue of Bonus Shares once made by the Board

cannot be withdrawn
Bonus Shares can be issued if
(i) Authorisation by articles of association;
(ii) Board and shareholders approval;
(iii) there being no partly paid-up shares.
(iv)No issue of bonus shares in lieu of dividend
ProhibitiononIssueofBonusshares: iftheCompanyhasdefaultedinpaymentof:
Interest/ Principal in respect of Fixed Deposits or Debt
Securitiesissuedbyit
Statutory dues of employees such as contribution to
providentfund,gratuity,Bonus.

Case 1:
a) A company issue bonus shares in
the 2:1 ratio.They distributed the
bonus out of capital revaluation
reserves.The CLB(now NCLT)
opposed the bonus issue of the
company. Can company still issue
bonus after CLB objection?

Buy-backofShares/Securities

SEBIs norms

It is mandatory for the companies to repurchase at least 50 per

cent of the offers, under the new norms issued by Sebi in August,
2013.
Those not able to meet the target would be barred from launching
another offer for a period of one year while they could also be
imposed with a penalty amounting to maximum of 2.5 per cent
on the funds lying in the escrow account.
Moreover, the companies are now required to complete their
buyback offers within six months as against 12 months allowed
earlier.
Companies can buyback shares in two way -- open market and
tender offer.In an open market offer, firms can buyback shares
from shareholders without knowing the buyer, while tender offer
involves the company writing to its shareholders individually to
know their willingness for sale of shares in the buyback.

Applicability
For Unlisted Public and Private Companies
Section 68, 69 and 70 of Companies Act, 2013 &
Rule 17 of
Companies (Share Capital and Debentures) Rules
, 2014
For Listed Companies : Section 68, 69 and 70
of Companies Act, 2013 Rule 17 of Companies
( Share Capital and Debentures) Rules, 2014
Securities and Exchange Board of India (Buy-back
of Securities) Regulations, 1998 and Securities
and Exchange Board of India (Buy-back of
Securities) (Amendment) Regulations, 2013

Buyback of Shares
1) A company may buy its own securities from (referred
to buy back) out of : a. its free reserves;
b. the securities premium account
C. proceeds of the issue of any shares or other
specified securities.
Provided that no buy back of any kind of shares
or securities from same kinds of proceeds
2) No company shall purchase its own shares or other
specified securities under sub-section (1), unless
(a) the buy-back is authorised by its articles;
(b) a special resolution has been passed at a general
meeting of the company authorising the buy-back

 Provided that nothing contained in

this clause shall apply to a case
where
(i) the buy-back is, ten per cent. or
less of the total paid-up equity
capital and free reserves of the
company; and
(ii) such buy-back has been
authorised by the Board by means of
a resolution passed at its meeting;

 (c) the buy-back is twenty-five per cent. or less of

the aggregate of paid-up capital and free reserves
of the company:
Provided that in respect of the buy-back of equity
shares in any financial year, the reference to
twenty-five per cent. in this clause shall be
construed with respect to its total paid-up equity
capital in that financial year;
(d) the ratio of the aggregate of secured and
unsecured debts owed by the company after buyback is not more than twice the paid-up capital and
its free reserves:
Provided that the Central Government may, by
order, notify a higher ratio of the debt to capital and
free reserves for a class or classes of companies;

 (e) all the shares or other specified securities for

buy-back are fully paid-up;
(4) Every buy-back shall be completed within a
period of one year from the date of passing of
the special resolution, or as the case may be, the
resolution passed by the Board under clause (b)
of sub-section (2).
(5) The buy-back under sub-section (1) may be
(a) from the existing shareholders or security
holders on a proportionate basis;
(b) from the open market;
(c) by purchasing the securities issued to
employees of the company pursuant to a scheme
of stock option or sweat equity

6) Where a company completes a buy-back of

its shares or other specified securities under
this section, it shall not make a further issue
of the same kind of shares or other securities
including allotment of new shares or other
specified securities within a period of six
months except by way of a bonus issue or
in the discharge of subsisting obligations
such as conversion of warrants, stock
option schemes, sweat equity or
conversion of preference shares or
debentures into equity shares.

 (7) No company shall directly or indirectly purchase its

own shares or other specified securities
(a) through any subsidiary company including its own
subsidiary companies;
(b) through any investment company or group of
investment companies; or
(c) if a default, is made by the company, in the
repayment of deposits accepted either before or after the
commencement of this Act, interest payment thereon,
redemption of debentures or preference shares or
payment of dividend to any shareholder, or repayment of
any term loan or interest payable thereon to any financial
institution or banking company:
Provided that the buy-back is not prohibited, if the
default is remedied and a period of three years has
lapsed after such default ceased to subsist.

(8) Where a company purchases its own shares out of

free reserves or securities premium account, a sum
equal to the nominal value of the shares so purchased
shall be transferred to the capital redemption reserve
account and details of such transfer shall be disclosed
in the balance sheet.
(a) The capital redemption reserve account may be
applied by the company, in paying up unissued shares
of the company to be issued to members of the
company as fully paid bonus shares.
9)Declaration of solvency.

Case 1:

Jindal Steel & Power Ltd has informed BSE that as per
Regulation 14(3) of the Securities and Exchange Board of
India (Buyback of Securities) Regulations, 1998, as amended
(the Buy-Back Regulations), the Company has utilized atleast 50% of the amount earmarked for the Buy-Back as
specified in the resolution passed by the Board of Directors at
its meeting held on August 30, 2013, i.e., the Minimum BuyBack Size of Rs. 500 crores.
Accordingly, pursuant to paragraphs 1.7 and 4.3 of the public
announcement dated September 06, 2013 (the
Announcement), the duly authorized Sub-Committee of
Directors of the Company at its meeting held on February 04,
2014, unanimously approved that the buy-back offer of equity

 shares of the Company be closed on February

18, 2014, being a date earlier than the last date
for the completion of buy-back mentioned in
the Announcement, i.e. March 15, 2014. The
intimation regarding early closure of Buy back
was sent vide Company's letter dated February
04, 2014.Further the Company has informed
that, as per above decision, the Buy back has
closed on February 18, 2014

 On 9th Oct 2014: Infosys' board on

Friday approved a bonus issue of one
equity share for every equity share
held by investors. The company also
announced a dividend of Rs 30 per
share . The two announcements led
to a 7 per cent surge in stock prices
and sent Infosys to a 52-week high of
Rs 3,908 in intraday trade. Infosys
has not fixed a record date for the
bonus issue yet.

Debentures

(1) A company may issue debentures with an option to convert

such debentures into shares, either wholly or partly at the time
of redemption:
Provided that the issue of debentures with an option to convert
such debentures into shares, wholly or partly, shall be approved
by a special resolution passed at a general meeting.
(2) No company shall issue any debentures carrying any voting
rights.
(3) Secured debentures may be issued by a company subject to
such terms and conditions as may be prescribed.
(4) Where debentures are issued by a company under this section,
the company shall create a debenture redemption reserve
account out of the profits of the company available for payment
of dividend and the amount credited to such account shall not
be utilised by the company except for the redemption of

 The Central Government may

prescribe the procedure, for securing
the issue of debentures, the form of
debenture trust deed, the procedure
for the debenture-holders to inspect
the trust deed and to obtain copies
thereof, quantum of debenture
redemption reserve required to be
created and such other matters.

Power to nominate
(1) Every holder of securities of a company may, at any
time, nominate, in the prescribed manner, any person to
whom his securities shall vest in the event of his death.
(2) Where the securities of a company are held by more
than one person jointly, the joint holders may together
nominate, in the prescribed manner, any person to whom
all the rights in the securities shall vest in the event of
death of all the joint holders.
(3) Where the nominee is a minor, it shall be lawful for
the holder of the securities, making the nomination to
appoint, in the prescribed manner, any person to become
entitled to the securities of the company, in the event of
the death of the nominee during his minority.