MEETINGS AND

WINDING UP OF
COMPANY

Under the Companies Act, 1956 a private company could start its
business immediately upon receiving certificate of incorporation.
They were not required to obtained a certificate of commencement
of business under section 149 of Companies Act, 1956
Now under Section 11 of the Companies Act, 2013, ALL companies
having a share capital shall not commence business or exercise any
borrowing powers, unlessthey acquire a Certificate of
Commencement of Business.
There are some requirements which need to be fulfilled to get the
certificate of commencement of business

11.Commencement of business, etc

(1) A company having a share capital shall not commence any business or exercise any
borrowing powers unless
(a) a declaration is filed by a director in such form and verified in such manner as may be
prescribed, with the Registrar that every subscriber to the memorandum has paid the
value of the shares agreed to be taken by him and the paid-up share capital of the
company is not less than five lakh rupees in case of a public company and not less
than one lakh rupees in case of a private company on the date of making of this
declaration; and
(b) the company has filed with the Registrar a verification of its registered office as
provided in sub-section (2) of section 12.
(2) If any default is made in complying with the requirements of this section, the company shall
be liable to a penalty which may extend to five thousand rupees and every officer who is in
default shall be punishable with fine which may extend to one thousand rupees for every day
during which the default continues.
(3) Where no declaration has been filed with the Registrar under clause (a) of subsection (1)
within a period of one hundred and eighty days of the date of incorporation of the company
and the Registrar has reasonable cause to believe that the company is not carrying on any
business or operations, he may, without prejudice to the provisions of sub-section (2), initiate
action for the removal of the name of the company from the register of companies under
Chapter XVIII.

Meetings of a Company
Shareholders

BoD

Meetings of Shareholders
General Meetings

Annual General
Meeting

Class Meetings

Extraordinary
Meeting (only when
required)

114. (1) A resolution shall be an ordinary resolution if the notice required under this
Act has been duly given and it is required to be passed by the votes cast, whether on a
show
of hands, or electronically or on a poll, as the case may be, in favour of the resolution,
including the casting vote, if any, of the Chairman, by members who, being entitled so to
do,
vote in person, or where proxies are allowed, by proxy or by postal ballot, exceed the
votes,
if any, cast against the resolution by members, so entitled and voting.
(2) A resolution shall be a special resolution when
(a) the intention to propose the resolution as a special resolution has been duly
specified in the notice calling the general meeting or other intimation given to the
members of the resolution;
(b) the notice required under this Act has been duly given; and
(c) the votes cast in favour of the resolution, whether on a show of hands, or electronically
or on a poll, as the case may be, by members who, being entitled so to do, vote in person
or by proxy or by postal ballot, are required to be not less than three times the
number of the votes, if any, cast against the resolution by members so entitled and
voting.

DECISION MAKING BY DIRECTORS

DECISION MAKING BY DIRECTORS

Board meeting
Resolution by circulation
Committee meetings

BOARD MEETING SECTION 173

First Board Meeting to be held within 30 days of incorporation.

Notice of Board meeting shall be given to all directors, whether he is in India or

outside India by hand delivery or by post or by electronic means.
At least one independent director to be present at a Board Meeting called at shorter
notice to transact urgent business.
In case of absence of independent directors from board meeting, decisions taken at
meeting shall be circulated to all the directors and shall be final if ratified by a
independent director.
Director can participate in the Board meeting through video conferencing or other
audio visual mode as may be prescribed.

Draft Rules provide for the procedure and manner of such process

BOARD MEETINGS: VIDEO CONFERENCING

The procedure of conduction of Board Meetings through Video Conferencing is
specifically provided for, with major responsibilities casted upon the Chairman of the
Company and Company Secretary.
An important provision provides that every director who attended the meeting,
whether personally or through video conferencing or other audio visual means, shall
confirm or give his comments, about the accuracy of recording of the proceedings
of that particular meeting in the draft minutes, within seven days after receipt of the
draft minutes failing which his approval shall be presumed.
This provision is very important as far as the liability of Directors is concerned.
MATTERS NOT TO BE DEALT IN MEETING THROUGH VIDEO
CONFERENCING
To approve the annual financial statements; and
To approve the boards report.

BOARD MEETING SECTION 173

At least 4 Board meetings should be held each year, with a gap of not more
than 120 days between two Board meetings

No requirement of holding the Board Meeting in every quarter

For One Person Company (OPC), small company and dormant company at
least 1 Board meeting must be held in each half of a calendar year with a gap
of not less than 90 days between two Board Meetings
In case of only One Director in OPC, requirement of holding meeting will not
apply
Resolution by circulation shall be approved if consented by majority of
Directors instead of the requirement of consent of all Directors present in
India or by majority of them (as was provided in the Companies Act 1956)

MATTERS TO BE DISCUSSED IN
BOARD MEETINGS ONLY (SECTION 179)
To issue securities whether in India or outside.

To grant loans or give guarantee or provide security in respect of loans;

To approve financial statement and the directors report;

To diversify the business of the company;

To approve amalgamation, merger or reconstruction;

To take over a company or acquire a controlling or substantial stake in
another company

MATTERS TO BE DISCUSSED IN
BOARD MEETINGS ONLY (SECTION 179)

MATTERS TO BE DISCUSSED IN
BOARD MEETINGS ONLY (SECTION 179)

ANNUAL RETURN - Contents

(Sec 92)

Registered
office,
principal
business
activities
securities
and
shareholdin
g pattern
Indebtednes
s

Members
and
debenture
holders
Promoters,
directors,
key
managerial
personnel
Meetings of
members

Meeting of
board and
committees
Remunerati
on of
directors
and KMP
Penalty or
punishment
& details of
compoundin
g

shares held
by or on
behalf of
the FIIs
other
matters as
may be
prescribed.

92. Annual return.

(1) Every company shall prepare a return (hereinafter referred to as the annual
return) in the prescribed form containing the particulars as they stood on the close of the
financial year regarding
(a) its registered office, principal business activities, particulars of its holding,
subsidiary and associate companies;
(b) its shares, debentures and other securities and shareholding pattern;
(c) its indebtedness;
(d) its members and debenture-holders along with changes therein since the
close of the previous financial year;
(e) its promoters, directors, key managerial personnel along with changes therein
since the close of the previous financial year;
(f) meetings of members or a class thereof, Board and its various committees
along with attendance details;
(g) remuneration of directors and key managerial personnel;

(h) penalty or punishment imposed on the company, its directors or officers and
details of compounding of offences and appeals made against such penalty or
punishment;
(i) matters relating to certification of compliances, disclosures as may be
prescribed;
(j) details, as may be prescribed, in respect of shares held by or on behalf of the
Foreign Institutional Investors indicating their names, addresses, countries of
incorporation, registration and percentage of shareholding held by them; and
(k) such other matters as may be prescribed,
and signed by a director and the company secretary, or where there is no company secretary,
by a company secretary in practice:

Provided that in relation to One Person Company and small company, the annual
return shall be signed by the company secretary, or where there is no company secretary, by
the director of the company.
(2) The annual return, filed by a listed company or, by a company having such paid-up
capital and turnover as may be prescribed, shall be certified by a company secretary in
practice in the prescribed form, stating that the annual return discloses the facts correctly
and adequately and that the company has complied with all the provisions of this Act.
(3) An extract of the annual return in such form as may be prescribed shall form part of
the Boards report.
(4) Every company shall file with the Registrar a copy of the annual return, within sixty
days from the date on which the annual general meeting is held or where no annual general
meeting is held in any year within sixty days from the date on which the annual general
meeting should have been held together with the statement specifying the reasons for not
holding the annual general meeting, with such fees or additional fees as may be prescribed,
within the time as specified, under section 403.

(5) If a company fails to file its annual return under sub-section (4), before the expiry of
the period specified under section 403 with additional fee, the company shall be punishable
with fine which shall not be less than fifty thousand rupees but which may extend to
five lakhs rupees and every officer of the company who is in default shall be punishable with
imprisonment for a term which may extend to six months or with fine which shall not be less
than fifty thousand rupees but which may extend to five lakh rupees, or with both.
(6) If a company secretary in practice certifies the annual return otherwise than in
conformity with the requirements of this section or the rules made thereunder, he shall be
punishable with fine which shall not be less than fifty thousand rupees but which may
extend to five lakh rupees.

Quorum for Board meetings

The quorum for
meeting of board is
one third of total
strength or two
directors whichever is
higher

Soft copy as an option

for keeping books of
accounts
Financial statements
on companies website.

Participation is allowed through video

conference provided such participation is
capable of recording and recognizing and
storing
E commerce has been
proposed for
maintenance and
inspection of
documents, however
the MoM have to be
taken in hard copy,
duly signed and then
can be kept in soft
copy for inspection

BOARDS REPORT

Extract of
Annual
Return

No. of BMs

Declaration
by
Independent
Director

Directors
Responsibilit
y Statement
Comments/e
xplanation
by BOD on
Secretarial
Audit Report
Particulars of
loan/guarant
ee/
investment

Particulars of
contracts/arr
angements
with related
party
Material
changes
from end of
FY to date of
Report
Statement
on risk
management
policy

Details of
CSR policy
developed
and
implemented
BOD/Committ
ees
performance
evaluation
Other such
matters

BOARDS REPORT:
OTHER MATTERS PRESCRIBED
financial
summary/highlight
s

Companies ceased
to be Subsidiaries,
JVs or associate
companies;

Details of
directors or KMP

Details relating
to Deposits

change in the
nature of
business,

Details of significant
and material orders
passed by the
Regulators or courts

MEETINGS AND RELATED MATER

GENERAL MEETINGS

Section 96

(1) Every company other than a One Person Company shall in each year hold in addition to any
other meetings, a general meeting as its annual general meeting and shall specify the meeting as
such in the notices calling it, and not more than fifteen months shall elapse between the date of one
annual general meeting of a company and that of the next:
Provided that in case of the first annual general meeting, it shall be held within a period of nine
months from the date of closing of the first financial year of the company and in any other case,
within a period of six months, from the date of closing of the financial year:
Provided further that if a company holds its first annual general meeting as aforesaid, it shall not be
necessary for the company to hold any annual general meeting in the year of its incorporation:
Provided also that the Registrar may, for any special reason, extend the time within which any
annual general meeting, other than the first annual general meeting, shall be held, by a period not
exceeding three months.
(2) Every annual general meeting shall be called during business hours, that is, between 9 a.m. and
6 p.m. on any day that is not a National Holiday and shall be held either at the registered office of
the company or at some other place within the city, town or village in which the registered office of
the company is situated.

REPORT ON AGM
(Sec 121)

QUORUM FOR MEETINGS

Public Company
5 members personally
present

1000 members

15 members personally
present

> 1000 members but

5000 members

30 members personally
present

> 5000 members

Private Company

2 members personally
present

PROXIES (SECTION 105)

STATEMENT TO BE ANNEXED WITH

NOTICE SEC 102
Explanatory Statement in case of special
business to specify

Liability in case of non-disclosure or insufficient

disclosure in Explanatory Statement
Nondisclosure
/insufficient
disclosure

Nature of
interest/
concern

Financial
Interest

Director
and
Manager

Other
Interest

KMP

Relatives

Explanatory statement to specify shareholding %

of
Promoters/directors/manager/KMP
whose
shareholding is not less than 2% of paid up
capital

Benefit

Promoter

Profit

Director
and
Manager

KMP

Liable to compensate to Company to the

extent of such profit/benefit

POSTAL BALLOT SECT 110

RESOLUTIONS REQUIRING SPECIAL NOTICE &

CLOSURE OF REGISTER OFMEMBER
RESOLUTIONS REQUIRING
SPECIAL NOTICE SEC 115

CLOSURE OF REGISTER OFMEMBER

SECTION 88

IS CLOSURE OF
REGISTER OF
MEMBERS STILL
REQUIRED IN TODAYS
CONTEXT ?

100. Calling of extraordinary general meeting

(1) The Board may, whenever it deems fit, call an extraordinary general meeting of
the company.
(2) The Board shall, at the requisition made by,
(a) in the case of a company having a share capital, such number of members
who hold, on the date of the receipt of the requisition, not less than one-tenth of such
of the paid-up share capital of the company as on that date carries the right of voting;
(b) in the case of a company not having a share capital, such number of members
who have, on the date of receipt of the requisition, not less than one-tenth of the total
voting power of all the members having on the said date a right to vote,
call an extraordinary general meeting of the company within the period specified in subsection (4).

(3) The requisition made under sub-section (2) shall set out the matters for the
consideration of which the meeting is to be called and shall be signed by the requisitionists
and sent to the registered office of the company.
(4) If the Board does not, within twenty-one days from the date of receipt of a valid
requisition in regard to any matter, proceed to call a meeting for the consideration of that
matter on a day not later than forty-five days from the date of receipt of such requisition, the
meeting may be called and held by the requisitonists themselves within a period of three
months from the date of the requisition.
(5) A meeting under sub-section (4) by the requisitionists shall be called and held in
the same manner in which the meeting is called and held by the Board.
(6) Any reasonable expenses incurred by the requisitionists in calling a meeting under
sub-section (4) shall be reimbursed to the requisitionists by the company and the sums so
paid shall be deducted from any fee or other remuneration under section 197 payable to such
of the directors who were in default in calling the meeting.

Section 118 Minutes of Meetings

Minutes of proceedings of general meeting, meeting of Board of Directors and other meeting and resolutions
passed by postal ballot.
(1) Every company shall cause minutes of the proceedings of every general
meeting of any class of shareholders or creditors, and every resolution passed by postal
ballot and every meeting of its Board of Directors or of every committee of the Board, to be
prepared and signed in such manner as may be prescribed and kept within thirty days of the
conclusion of every such meeting concerned, or passing of resolution by postal ballot in
books kept for that purpose with their pages consecutively numbered.

(2)..(12)

121. Report on annual general meeting

(1) Every listed public company shall prepare in the prescribed manner a report on
each annual general meeting including the confirmation to the effect that the meeting was
convened, held and conducted as per the provisions of this Act and the rules made thereunder.
(2) The company shall file with the Registrar a copy of the report referred to in subsection
(1) within thirty days of the conclusion of the annual general meeting with such fees
as may be prescribed, or with such additional fees as may be prescribed, within the time as
specified, under section 403.
(3) If the company fails to file the report under sub-section (2) before the expiry of the
period specified under section 403 with additional fee, the company shall be punishable with
fine which shall not be less than one lakh rupees but which may extend to five lakh rupees
and every officer of the company who is in default shall be punishable with fine which shall
not be less than twenty-five thousand rupees but which may extend to one lakh rupees.

COMMITTEE OF BOARD

NOMINATION AND
RENUMERATION
COMMITTEE SECTION 178

SHAREHOLDERS GRIEVENCE
COMMITTEE SECTION 178

Committee shall
consider and
resolve the
grievances of
security holders of
the company

For companies >

1000 shareholders,
debenture-holders,
deposit-holders
and other security
holders at any time
during a FY

Chairperson : nonexecutive director

and other members
as may be decided by
the Board

AUDIT COMMITTEE SECTION 177

AUDIT
COMMITTEE.VIGIL
MECHANISM
Whistle
Blower (a
non
mandator
y item as
per Cl 49)
is now
made
mandator
y, in the
name of
Vigil
Mechanis
m

Introduction of NCLT

The creation of a single forum (NCLT) which is dedicated to corporate matters is a

welcome move, and removes the problem of multiple regulators.

The establishment of NCLT and NCLAT will have the following

beneficial effects:
(i) reduce the pendency of cases and reduce the period of windingup process from 20 to 25 years to about two years;
(ii) avoid multiplicity of litigation before various fora (High Courts
and quasi-judicial Authorities like CLB, BIFR and AAIFR) as all can
be heard and decided by NCLT;
(iii) the appeals will be streamlined with an appeal provided against
the order of the NCLT to an appellate Tribunal (NCLAT) exclusively
dedicated to matters arising from NCLT, with a further appeal to the
Supreme Court only on points of law, thereby reducing the delay in
appeals; and
(iv) with the pending cases before the Company Law Board and all
winding-up cases pending before the High Courts being transferred
to NCLT, the burden on High Courts will be reduced and BIFR and
AAIFR could be abolished.

Introduction of NCLT
SC (Only on the Question of Law)

Appeal Can be made to NCLAT

Powers Vested to NCLT

Particulars

High Court

CLB

BIFR

Other
Seeking exemption for having FY of a company
which ends on a day other than 31 March;

Powers

Issue of further redeemable preference shares in

lieu of arrears of dividend or failure to redeem
High Courts primarily
existing reference shares as per the terms of
in
BIFR under the Sick
CLB under the
issue;
relation to winding-up,
Industrial
Companies Act, 1956
Companies (Special
Preparation of revised financial statement or
primarily oppression
amalgamation,
Provisions) Act,
and mismanagement
board report for past 3 FYs, where BOD believes
restructuring and
1985
that they do not comply with the relevant
appeals from CLB
provisions;
Conversion of a public limited company into a
private
limited
company;
Filing Class action suits;

Appeals

Within the HC
and then to
Supreme Court
(SC)

High Court (HC),

then appeal to SC

AAIFR , then
writ petition to
HC

Sec 271 provides the circumstances in which the wound by the

Tribunal
Sub clause (b) and ( c) of Section 271(1) are new grounds for
winding up by the tribunal
Provisional liquidator or Company liquidator to be appointed from a
panel maintained by the Central Government
The panel may consists of CAs, Advocates, CS, and cost
accountants.
LLPs
The process of winding up has been made time bound

VOLUNTARY WINDING UP
ASSETS > LIABILITIES
If Assets < Liabilities, the Winding Up By Tribunal,
Refer Next Slide
Resolution Passed
Liquidator
Appointed

+5
weeks

30
5

30
43
10

Decision
backed by
Affidavit

Fine: Rs. 500 per

day

+10
days

+1
day

30
6

31
2

Vote: 2/3
Ayes!

Fine: Rs. 50,000 to Rs. 2,00,000

and / or,
Imprisonment: Up to 6 months
Responsibility of
Company
Responsibility of
Liquidator

Progress
Report

+14
days

30
7

31
6

31
8

WOUND
UP

General Meeting
Report on Winding Up
Vote: 50% + 1 Ayes!

Official
Gazette
Newspaper
Every
Quarter

Fine: Up to Rs.
10,00,000

Time

WINDING UP BY CREDITORS
ASSETS < LIABILITIES
Every
Quarter

Statement of Affairs
submitted
Petition Accepted

30
6

+7
days

+14
days

27
2

Responsibility of
Creditor(s)
Responsibility of
Tribunal
Responsibility of

+7
days

27
5

27
7

+60
days

28
1
28
2

28
8

30
2

WOUND
UP

Forward copy of Tribunal

Order in which the dues are paid up:
Order to ROC within 30
1. Workmens dues
days
2. Government dues
Time
3. Secured creditors
4. Secured creditors floating charge
5. Unsecured creditors
6. Members
44

WINDING UP BY CREDITORS
DEMAND RAISED BY CREDITOR(S)
Every
Quarter

Statement of Affairs
submitted
Petition Accepted

27
1

+7
days

+21
days

27
2

Responsibility of
Creditor(s)
Responsibility of
Tribunal
Responsibility of

+7
days

27
5

27
7

+60
days

28
1
28
2

28
8

30
2

WOUND
UP

Forward copy of Tribunal

Order in which the dues are paid up:
Order to ROC within 30
1. Workmens dues
days
2. Government dues
Time
3. Secured creditors
4. Secured creditors floating charge
5. Unsecured creditors
6. Members